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Tata Neu Can Take Market Share Away From Competitors In Grocery, Lifestyle Segments: JM Financial

Tata Neu Can Take Market Share Away From Competitors In Grocery, Lifestyle Segments: JM Financial

The report said that the super app was launched with an aim of leveraging the utilisation of the Group’s underlying assets such as software, customer data, a delivery fleet or fulfilment centres

JM Financial said the offerings on the platform are neither adjacent nor all-encompassing, and that the products from just Tata Group curb a customer's choice and price discovery

Referring to the incumbents, the brokerage firm cited three main competitors to the Tata Neu super app – Flipkart, Amazon and Reliance

Brokerage firm JM Financial Institutional Securities has said that the Tata Group, which has leadership in the online grocery segment and brands in the lifestyle and electronics segment, is well positioned to take market share away from the competitors through Tata Neu, the Group’s flagship super app. 

Tata Neu is not merely a digital front of a hypothetical Tata mall hosting multiple brands at one place, but an ecosystem bringing the conglomerate’s data-driven omnichannel experience to consumers across multiple channels, news agency IANS reported JM Financial as saying in a report. 

The report further added that the super app was launched with an aim of leveraging the utilisation of the Group’s underlying assets such as software, customer data, a delivery fleet or fulfilment centres.

The report, however, pointed out two issues plaguing the platform when it comes to customer acquisition. The brokerage house noted that the offerings on the platform are neither adjacent nor all-encompassing. Secondly, limiting the offerings on the platform to just products from the Tata Group curbs a customer’s choice and price discovery. 

Interestingly, the brokerage firm also noted that the company is aware of these challenges and is not trying to alter a customer’s preferred shopping destination immediately.

“We believe Tata identifies these challenges and does not expect most users to shift to Tata Neu immediately. While Tata Neu does offer NeuPass as an incentive for customers to transact on its platform, the underlying construct is not to change a customer’s preferred shopping destination,” the report said. 

On the ecommerce segment, it said, “Entry of another large player into India’s already crowded ecommerce space could spur further consolidation in the market. Smaller ‘me-too’ players are likely to lose out. Further, we see these large players continuing their hunt for specialised ecommerce players to fill their portfolio gaps in order to maintain leadership.” 

Referring to the incumbents, the brokerage firm cited three main competitors to the Tata Neu super app – Flipkart, Amazon and Reliance. All these players operate their own version of super apps that compete among each other for a chunk of the huge market.

Tata Digital rolled out Tata Neu in April this year. The platform consolidates multiple Tata Group brands under one umbrella offering a plethora of services on just one app. While many brands such as AirAsia India, bigbasket, Croma and others are already listed on Tata Neu, companies such as Vistara, Tanishq, Titan and others are expected to be onboarded soon.

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