Super app Neu fails to fix an old problem

WHEN IT WAS launched in April 2022 with a lot of fanfare, Tata Neu was heralded as the next big thing from one of India's most-celebrated conglomerates - the Tata group.

- URVI MALVANIA

Even after it faced initial technical glitches, the group's goodwill led almost everyone to bet on the super app's success. Two-and-a-half years later, however, the enthusiasm has waned substantially.

The consensus seems to be that in its bid to offer a complete selling experience, Neu has not been able to shake off the old problem of most super apps - they are jack of all trades but master of none because today's consumers prefer more specialized shopping sites. This lack of a differentiation in a cluttered and crowded e-commerce landscape along with technical issues has hit Neu hard.

Numbers bear this out. The app missed its first-year revenue targets by 50%. Tata Digital, the holding company, saw widening of losses at ₹5,553.11 crore in FY23, the year of Tata Neu's launch, from ₹2,945.01 crore a year ago, on the back of a major rise in purchase stock in-trade and other expenses, which analysts attribute to tech development and marketing. The initial investment into the exercise was estimated to be $2 billion.

A detailed questionnaire sent to Tata Digital did not elicit any response.

Professor DVR Seshadri of Indian School of Business (ISB) says, "While the perception within the Tata Neu launch team was that it was implementing a blue ocean strategy, it actually entered a quasi-red ocean, with many established incumbents in the allied broad-spectrum apps space. The problems that unfolded for Neu may have had their origins in this fact."