The Tata Group’s super app, Tata Neu, is ready to enter the online food ordering sector by leveraging the Open Network for Digital Commerce (ONDC), a government-backed initiative to standardize e-commerce platforms. Tata Neu aims to offer a wide range of food options from various eateries across cities, challenging the dominance of Swiggy and Zomato in the food delivery market.
What is ONDC?
ONDC is a project by the Department for Promotion of Industry and Internal Trade (DPIIT) that seeks to create an open and interoperable network for digital commerce, where consumers can access products and services from any platform without being locked in by proprietary systems. ONDC is based on the principles of decentralization, inclusion, innovation and empowerment. ONDC aims to reduce entry barriers for new players, promote fair competition and protect consumer rights.
How will Tata Neu use ONDC?
According to sources, Tata Neu is working closely with Zomato-backed Magicpin on its ONDC integration. Magicpin is one of the eight entities selected by DPIIT to pilot the ONDC project. Magicpin is a hyperlocal discovery platform that connects consumers with local merchants and offers rewards for transactions. Tata Neu will use Magicpin’s network of merchants to offer food ordering services to its users, along with its own portfolio of brands such as Starbucks, Chaayos, Big Basket and more.
What are the benefits for Tata Neu?
By entering the food delivery market via ONDC, Tata Neu hopes to achieve two objectives: one, to create a high-frequency use case that will bring consumers back to the app regularly; and two, to cross-sell its other products and services on the app, across categories like apparel, jewellery, grocery, electronics, flights and more. Tata Neu also hopes to leverage its loyalty program, Tata One, to offer discounts and rewards to its users.
What are the challenges for Tata Neu?
Tata Neu will face stiff competition from Swiggy and Zomato, who have established a strong presence in the food delivery market with millions of users and thousands of restaurant partners. Swiggy and Zomato also have an edge in terms of technology, logistics and customer service. Tata Neu will have to invest heavily in marketing, infrastructure and quality control to match up with the incumbents. Tata Neu will also have to comply with the ONDC standards and regulations, which may limit its flexibility and innovation.
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