Tata Neu is a solution to Tata’s problem

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Good Morning Pricey Reader,


On Thursday night, Tata Neu went stay throughout all cell app shops in India.


And properly, right here’s the way it appears to be like.

Sure, the Tata Group, India’s largest conglomerate and one which’s been round for the final 150 years, has lastly made a daring transfer aimed on the future—and it’s completed it by going all-in on a digital technique that’s centred round a single app referred to as Tata Neu. The concept is that customers can use Tata Neu to do something and every little thing round e-commerce and funds. Wish to ebook tickets? Tata Neu. Purchase garments? Tata Neu. Pay electrical energy payments? Tata Neu. 


If I needed to summarise the technique in a single memorable verse, it could be this. 


One app to rule all of them,

one app to search out them,

one app to convey all of them,

and within the darkness bind them.


I exploit the phrase darkness right here actually, in fact. Most apps sometimes use darkish textual content on a light-weight background. Not the opposite approach round. However Tata Neu appears to have determined to go the opposite approach, for causes finest recognized to them. 


Final yr, when studies emerged that the Tata Group was engaged on an excellent app, I asked subscribers of this article to unravel what I referred to as the Tata Digital puzzle. I wrote the version like an abbreviated model of a case-study, going into the historical past and the motivations of the Tata Group’s digital ambitions and the way it desires to make use of its belongings to create one thing India had by no means seen earlier than. 


Right here’s the query I posed to subscribers. 

In some ways Tata is doing the reverse of what Reliance is doing. Reliance created a platform, bought cash into it, and used it to execute and construct. Tata created a platform, used its personal cash to purchase and assemble others into it, and is now attempting to determine how one can make all of this work collectively.


Reliance wants to determine execution.
Tata wants to determine integration.
The story isn’t over, although. Lots stays unclear.


How will Tata resolve its e-commerce downside?


What is going to it purchase subsequent?


And the way will all of those corporations work collectively? In what vogue?
What is going to Tata do subsequent?


Write again. Inform me.

How would you resolve the Tata Digital puzzle, The Nutgraf

A ton of subscribers wrote again to me with a number of fascinating views. A few of you even despatched me detailed block diagrams and organisation charts of how Tata Group may mix all of its belongings to create one thing really formidable. Overwhelmed by the response, we even created a Twitter Area, the place lots of of subscribers joined and listened to others share their arguments over a number of hours. In the event you ask those that attended, I believe they’ll let you know that it was immensely pleasing. 


Which is why, on Thursday, when the tremendous app lastly went stay, it turned obvious that Tata Neu had a number of elementary errors. It wasn’t a lot of an excellent app, however extra like a discovery app linking to a number of digital properties of Tata. It had a cluttered residence display screen. And from an expertise standpoint, it wasn’t notably revolutionary. 


However above all, Tata’s superapp had made a elementary error. It’s a mistake that huge, legacy, corporations usually make after they push ahead with a client app play, aiming to be as nimble as startups. It’s a mistake that just about everybody makes—from banks to insurance coverage corporations, to retail chains and media giants. After they fail, regardless of their superior assets, it’s virtually all the time due to this purpose. 


Tata Neu doesn’t resolve a giant, pressing downside that exists out there. 


As an alternative, Tata Neu finally ends up fixing for Tata itself. That’s why it exists. 


Let’s dive in. 

Tata Neu is attempting to alter behaviour on each ends of the funnel

To be truthful, Tata is fixing an immensely difficult downside. It’s a legacy firm attempting to rework itself into an enormous digital entity, and it’s attempting to do that in an setting the place entities contained in the Tata Group aren’t notably shut to one another. 


And to be fairer, it largely did all the fitting issues main as much as Tata Neu. It created an e-commerce entity (Tata Cliq) and made strategic investments in all the fitting corporations, like 1mg and BigBasket, all leaders of their segments. 


The one half that was unknown was how it could assemble all of those elements collectively to create one thing really compelling. There was an expectation that Tata would determine a solution to hyperlink all of its assets and belongings to create one thing revolutionary. This product would use the entire constituent components to create a flywheel, which might inexorably suck in tens of millions and tens of millions of customers away from different purposes and lock them into the Tata ecosystem.


Mainly, lots of people thought that Tata would pull a Jio. 


And that’s what Tata Neu was purported to be. 


Nonetheless, when the app went stay, three issues turned evident. 


1. Tata Neu is an excellent app with out a core asset


In its essence, the core proposition of Tata Neu is that it offers a single vacation spot for customers to make purchases throughout a variety of classes. Customers get factors for purchases, referred to as Neu cash, which they’ll redeem to get rewards and reductions on future purchases, making a closed loop. 


This sounds good, in idea.


Nonetheless, if you happen to set up the Tata Neu app in your telephone, the very first thing you’ll discover is that it’s virtually a wall of affords and classes, all jammed collectively, with seemingly little personalisation or relevance. There are affords on air-conditioners, instantly adopted by one for Airpods, then for potato chips, medicines, girls’s western put on, make-up, and a function on Gujarat Titans, the IPL cricket crew. After which, there’s a whole part on getaway locations and staycations. 


Oh, and eventually, on the backside, I used to be proven a banner promoting a conventional plum cake recipe for the Christmas season.


In April. 


This isn’t simply restricted to the homescreen. In the event you faucet on any of the buttons, Tata Neu opens one other software within the web-view. So, if I faucet, say, a banner advert for potato chips, the Massive Basket app opens throughout the Tata Neu app. 


Then if I faucet on a T-shirt, growth, I’m now within the Tata Cliq app expertise. 


And it goes on and on. 

Once I requested Dhruv Saxena, founding father of Apparent, a strategic design consultancy in Bengaluru, about what he considered the app, he remarked that in the first place look, it appeared like “that they had shipped their org chart”


Admittedly, it’s a bit of unsettling to see a banner which provides me a ten% off on toor dal simply above a banner that provides me an exquisite staycation in Maldives. However in all honesty, issues like UX and design aren’t usually the principle the explanation why apps succeed or fail. 


No, the true downside is one thing deeper.


And it’s way more elementary to tremendous apps, particularly. 


The phrase “tremendous app” has been liberally used to explain apps which have a number of use-cases embedded inside them. Additionally, relying on who you ask, virtually something could be a tremendous app. Is Paytm* an excellent app? How about Telephone Pe? And even Amazon? 


There’s no acceptable definition for what makes an excellent app, particularly as a result of the time period itself was largely a marketing time period relatively than a descriptive one. Nonetheless, there’s one one who got here up with a descriptor for what makes for an excellent app. 

“Every time I see loads of hype round tremendous apps… the query there turns into: what’s it that you’re growing the effectivity of? In any other case it’s simply conventional diversification… There must be some widespread asset that you simply’re growing the effectivity & expertise for, [then] utilizing that to diversify. An excellent app is a platform play the place the underlying, core shared asset shouldn’t be a software program product asset in a conventional sense, it’s one thing much less apparent like, in our case, our fleet.”


Sidu Ponnappa, Gojek’s SVP of Engineering & former MD of Gojek India

In different phrases, what Ponnappa is saying is that superapps like Gojek added increasingly more verticals and use-cases to their app as a result of they needed to utilise their core shared asset, i.e., their two-wheeler supply fleet, higher and extra effectively.

This definition is simpler to use to offline core belongings, versus, say, WeChat. However one can argue that WeChat’s core asset is instantaneous messaging between customers, and use-cases like funds, information, and the like are methods of accelerating the effectivity of that core asset. Nonetheless, that is predicated by the truth that tremendous apps can add increasingly more verticals solely as a result of the demand for them outpaces the availability. 


So, what’s Tata Neu’s core asset whose effectivity is being elevated?


It’s onerous to say. 


Customers? Clients? 


Not likely. 


If something, possibly the core asset whose expertise is being elevated is the brand new function that Tata launched within the app—Neu Cash. One may argue that it is a core asset and that the app has been created to effectively use this. 


It’s a stretch to imagine that the demand is so excessive that there was a must effectively use NeuCoins, however truthfully, I can’t consider the rest. 


2. Tata Neu’s core person downside 


In the event you answered, the individuals who commonly store on a number of of Tata’s a number of digital locations like Massive Basket, Cliq, or Vistara, suppose once more. 


Why would Massive Basket’s loyal customers instantly change to utilizing Tata Neu over Massive Basket? Why would Taj lodge’s repeat customers try this? Certain, you would argue that they’d change as a result of Tata Neu would give them incentives towards their loyalty. On this case, it’s within the type of a forex referred to as Neu Cash. 


However even this looks as if a stretch. Individuals get factors for making purchases on-line utilizing their bank cards on a regular basis. Suppose a bank card firm like American Categorical allowed you to buy on Amazon in a web-view by way of the Amex app, would you turn to utilizing that? Doubt it.


No. In actual fact, if you happen to ask me, a major a part of Tata Neu’s core customers can be Tata’s dormant customers. These are the customers who’ve purchased an costly watch on Titan a number of years in the past and nonetheless have factors mendacity of their account. Most of them most likely don’t even know that these factors exist, and there could also be those that do do not know what to do with it, as a result of they don’t plan to purchase one other costly watch. 


Nonetheless, if Tata Neu converts loyalty factors throughout Tata’s numerous merchandise right into a single forex which can be utilized throughout Tata’s properties, I’d think about which may be of some use to tens of millions of Tata’s dormant clients, who will be reactivated utilizing Tata Neu.


I additionally think about that one other cohort of Tata Neu’s core customers, purely by advantage of its positioning as a rewards vacation spot, would be the most dreaded of all cohorts. 






Lots of people imagine that everybody in India is a deal-seeker, however this isn’t true. In actual fact, if something, the significance of offers has been slowly declining for the typical Indian client. 


However not for the deal-seeker cohort. These are the customers who will do virtually something to get a reduction, deal, or a freebie. They may bounce by way of all of the hoops on the web, like visiting shady low cost aggregator web sites, unlawful streams, and have a working data of all of the phrases and circumstances and loopholes of cost merchandise like bank cards, debit playing cards, and loyalty level merchandise. It’s essential to keep in mind that deal-seeking is a client trait, and never essentially a perform of disposable revenue. For example, I do know a number of executives, VCs, and technique consultants who make crores yearly, however work very onerous at discovering methods to not pay for music, motion pictures, and even this article. 


Sometimes, in case you have an app that provides a compelling profit, deal seekers are one of the a number of cohorts that use your product. They type one in every of a number of cohorts who use apps like Flipkart, Myntra, CRED, Netflix, and The Ken. 


However what occurs if the compelling profit your app affords is principally rewards and reductions? 


To Tata Neu’s credit score, they know this. This isn’t simply idle hypothesis. Simply take a look at the Tata Neucoins touchdown web page, and the way cash are credited. That is created to guard the system from abuse by deal-seekers, who’re often out to sport it.

That’s the issue that Tata Neu is dealing with. Its core set of customers are dormant customers, who must be reactivated, and deal seekers, who’re attempting to get the most effective reductions. Of all of the cohorts on the earth, Tata Neu couldn’t have picked a worse set of core customers. These are the customers whom the app goes to should battle to have interaction and retain. 


Let’s simply say I don’t envy the digital advertising and product groups at Tata Neu. 


3. Tata’s double behaviour downside


The final curious factor about what Tata Neu is doing is their redemption and funds mechanism. 


Assuming you make a purchase order on Tata Neu and acquire all these factors, are you aware how one can redeem them? 

Seems, there’s just one approach to try this. 


It’s essential make the ultimate cost utilizing Tata Pay, Tata Neu’s UPI product. 


Don’t overlook, when UPI apps like Google Pay and PhonePe got here alongside, they provided a transparent profit—a greater technique to make funds. And as soon as customers modified the way in which they made funds, these apps tried to alter the place we made purchases by introducing issues like e-commerce, invoice funds, affords and many others. CRED did one thing related. It provided advantages to pay bank card payments, after which tried to introduce discovery and buy afterwards.


However, Tata Neu is doing two issues. It’s creating a brand new vacation spot and attempting to alter the place I purchase. As well as, it’s additionally altering how I pay for it. And it’s doing each on the identical time. 


I believe Tata Neu will discover out that there aren’t too many individuals who can be prepared to do each. 


This isn’t to say that the Tata Neu app is an entire catastrophe. Their onboarding is without doubt one of the most seamless flows on the market, as a result of they picked up my title, addresses, and every little thing else simply from my telephone quantity as a result of Massive Basket already had that info. Their implementation of tales, through the use of content material as a hook for discovery, is kind of good, and I might like to see the place they go along with it. 


However primarily, it’s clear that Tata Neu solves one downside. 


And that’s the one which my colleague, Seetharaman wrote about over a yr in the past.

Most significantly, RIL introduced all its entities collectively, every feeding off the opposite’s clients, knowledge, and companies. One thing the Tata Group has struggled to do. One thing which, based on the previous senior Tata CLiQ government quoted earlier, could also be its greatest problem.
“At Tata CLiQ, we discovered it simpler to have interaction with non-Tata manufacturers than with Tata manufacturers,” says the previous government. It is because Tata Group has a decentralised model of functioning. Its corporations are “fiercely impartial”, says a former senior government of Tata Sons.
It has struggled to create a group-wide buyer loyalty programme, too. A current try by Tata Insights and Quants (IQ), a five-year-old analytics unit of Tata Industries, to assist create one was met with Tata corporations’ reluctance to share buyer knowledge with one another, says a former government with Tata IQ.
A scarcity of capital and the Tata group’s reluctance to take dangerous bets meant that its client companies have had issues scaling as properly. Arvind Singhal, chairman and managing director of retail consultancy Technopak labels Tata Group’s digital efforts a Rip Van Winkle story. “They awakened after years and determined, let’s discuss one thing thrilling.”

Who’s standing in the way in which of Tata’s digital supremacy plan?, The Ken

Tata Neu is an answer to Tata’s issues. 

Take care.


Praveen Gopal Krishnan


*Paytm’s founder Vijay Shekhar Sharma is an investor in The Ken.

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