Tata Neu Taps ONDC To Foray Into Online Food Ordering Space

Tata Digital’s ecommerce super app Tata Neu is gearing up to venture into the online food ordering service by tapping the open network for digital commerce (ONDC) route.

As per Moneycontrol’s report, the company will initiate closed-user group trials in the next few days, with the entire feature taking a month or more to go live for the broader public.

Tata Neu’s involvement in ONDC aims to facilitate cost-effective food ordering without the need for a dedicated delivery fleet or restaurant partnerships. The super app is collaborating with Magicpin for ONDC integration, leveraging their expertise in technology services and restaurant onboarding.

The report further said that the app might eventually be integrated with ONDC for other categories, depending on consumers’ response to the move.

Apparently, the company’s vision behind entering food servicing is to develop a ‘high-frequency use case’ to bring consumers back to the app regularly. This is intended to leverage the cross-selling of other products on the app including apparel, jewellery, grocery, electronics, flights and more.

This development comes a week after Inc42 reported that Tata Digital is gearing up to take on investment tech platforms Zerodha and Groww by launching stock trading and mutual fund investment offerings on its fledgling super app Tata Neu.

The ONDC project at Tata Neu is led by Gaurav Porwal, a senior vice president at Tata Digital, which encompasses acquired consumer internet businesses like BigBasket and 1mg.

The conglomerate is purportedly planning a fresh billion-dollar fund infusion in Tata Digital, even after the latter logged a 5.6X YoY jump in its consolidated net loss to INR 3,052 Cr in FY22.

However, it has left no stone unturned to strengthen its digital presence. Beginning in 2021, Tata Digital undertook an acquisition spree and bought companies such as grocery delivery startup BigBasket and epharmacy platform 1mg.

These came in handy as the super app brought other offerings from various Tata-owned brands, such as Croma, CLiQ, Titan, Tanishq, Westside, and Air India on Tata Neu. 

Zomato-backed Magicpin, a significant player on ONDC, has diversified retail purchases by introducing categories like fashion and electronics, reducing reliance on food orders.

The development comes at a time when Tata Neu is set to see exodus of two more senior executives – Pavan Podila, chief software architect, and Samir Aksekar, chief information security officer.

With this, the two leaders join the row of the senior management of Tata Digital who have moved out of their respective positions.

In October 2023, Rajiv Subramanian, who was leading the Tata Neu’s travel division stepped down. 

Within a year, the company saw the exits of other senior executives, namely, Prateek Mehta and Sharath Bulusu. 

India’s online food delivery market volume is estimated to reach $81.9 Bn by 2028, growing at a CAGR of 19.7% during 2023-2028. Industry stalwarts like Zomato and Swiggy have laid the groundwork for the food-delivery ecosystem.