“Whenever I see a lot of hype around super apps… the question there becomes: what is it that you are increasing the efficiency of? Otherwise it’s just traditional diversification… There needs to be some common asset that you’re increasing the efficiency & experience for, [then] using that to diversify. A super app is a platform play where the underlying, core shared asset is not a software product asset in a traditional sense, it’s something less obvious like, in our case, our fleet.”

 

This definition is easier to apply to offline core assets, as opposed to, say, WeChat. But one can argue that WeChat’s core asset is instant messaging between users, and use-cases like payments, news, and the like are ways of increasing the efficiency of that core asset. However, this is predicated by the fact that super apps can add more and more verticals only because the demand for them outpaces the supply. 

 

So, what is Tata Neu’s core asset whose efficiency is being increased?

 

It’s hard to say. 

 

Users? Customers? 

 

Not really. 

 

If anything, maybe the core asset whose experience is being increased is the new feature that Tata introduced in the app—Neu Coins. One could argue that this is a core asset and that the app has been created to efficiently use this. 

 

It’s a stretch to believe that the demand is so high that there was a need to efficiently use NeuCoins, but honestly, I can’t think of anything else. 

 

2. Tata Neu’s core user problem 

 

If you answered, the people who regularly shop on one or more of Tata’s multiple digital destinations like Big Basket, Cliq, or Vistara, think again. 

 

Why would Big Basket’s loyal users suddenly switch to using Tata Neu over Big Basket? Why would Taj hotel’s repeat users do that? Sure, you could argue that they’d switch because Tata Neu would give them incentives against their loyalty. In this case, it’s in the form of a currency called Neu Coins. 

 

But even this seems like a stretch. People get points for making purchases online using their credit cards all the time. Suppose a credit card company like American Express allowed you to shop on Amazon in a web-view via the Amex app, would you switch to using that? Doubt it.

 

No. In fact, if you ask me, a significant part of Tata Neu’s core users would be Tata’s dormant users. These are the users who have bought an expensive watch on Titan several years ago and still have points lying in their account. Most of them probably don’t even know that these points exist, and there may be those who do have no idea what to do with it, because they don’t plan to buy another expensive watch. 

 

However, if Tata Neu converts loyalty points across Tata’s various products into a single currency which can be used across Tata’s properties, I’d imagine that may be of some use to millions of Tata’s dormant customers, who can be reactivated using Tata Neu.

 

I also imagine that another cohort of Tata Neu’s core users, purely by virtue of its positioning as a rewards destination, will be the most dreaded of all cohorts. 

 

Deal-seekers.

 

*shudder*

 

A lot of people believe that everyone in India is a deal-seeker, but this isn’t true. In fact, if anything, the importance of deals has been slowly declining for the average Indian consumer. 

 

But not for the deal-seeker cohort. These are the users who will do practically anything to get a discount, deal, or a freebie. They will jump through all the hoops on the internet, like visiting shady discount aggregator websites, illegal streams, and have a working knowledge of all the terms and conditions and loopholes of payment products like credit cards, debit cards, and loyalty point products. It’s important to remember that deal-seeking is a consumer trait, and not necessarily a function of disposable income. For instance, I know multiple executives, VCs, and strategy consultants who make crores every year, but work very hard at finding ways to not pay for music, movies, and even this newsletter. 

 

Typically, if you have an app that offers a compelling benefit, deal seekers are one of the several cohorts that use your product. They form one of several cohorts who use apps like Flipkart, Myntra, CRED, Netflix, and The Ken. 

 

But what happens if the compelling benefit your app offers is basically rewards and discounts? 

 

To Tata Neu’s credit, they know this. This isn’t just idle speculation. Just look at the Tata Neucoins landing page, and how coins are credited. This is created to protect the system from abuse by deal-seekers, who are usually out to game it.

That’s the problem that Tata Neu is facing. Its core set of users are dormant users, who need to be reactivated, and deal seekers, who are trying to get the best discounts. Of all the cohorts in the world, Tata Neu couldn’t have picked a worse set of core users. These are the users whom the app is going to have to fight to engage and retain. 

 

Let’s just say I don’t envy the digital marketing and product teams at Tata Neu. 

 

3. Tata’s double behaviour problem

 

The last curious thing about what Tata Neu is doing is their redemption and payments mechanism. 

 

Assuming you make a purchase on Tata Neu and collect all those points, do you know how to redeem them? 

Turns out, there’s only one way to do that. 

 

You need to make the final payment using Tata Pay, Tata Neu’s UPI product. 

 

Don’t forget, when UPI apps like Google Pay and PhonePe came along, they offered a clear benefit—a better method to make payments. And once users changed the way they made payments, these apps tried to change where we made purchases by introducing things like e-commerce, bill payments, offers etc. CRED did something similar. It offered benefits to pay credit card bills, and then tried to introduce discovery and purchase afterwards.

 

On the other hand, Tata Neu is doing two things. It’s creating a new destination and trying to change where I buy. In addition, it’s also changing how I pay for it. And it’s doing both at the same time. 

 

I think Tata Neu will find out that there aren’t too many people who will be willing to do both. 

 

This is not to say that the Tata Neu app is a complete disaster. Their onboarding is one of the most seamless flows out there, because they picked up my name, addresses, and everything else just from my phone number because Big Basket already had that information. Their implementation of stories, by using content as a hook for discovery, is quite smart, and I would love to see where they go with it. 

 

But primarily, it’s clear that Tata Neu solves one problem. 

 

And that is the one that my colleague, Seetharaman wrote about over a year ago.

Most importantly, RIL brought all its entities together, each feeding off the other’s customers, data, and businesses. Something the Tata Group has struggled to do. Something which, according to the former senior Tata CLiQ executive quoted earlier, may be its biggest challenge.
 
“At Tata CLiQ, we found it easier to engage with non-Tata brands than with Tata brands,” says the former executive. This is because Tata Group has a decentralised style of functioning. Its companies are “fiercely independent”, says a former senior executive of Tata Sons.
 
It has struggled to create a group-wide customer loyalty programme, too. A recent attempt by Tata Insights and Quants (IQ), a five-year-old analytics unit of Tata Industries, to help create one was met with Tata companies’ reluctance to share customer data with each other, says a former executive with Tata IQ.
 
A lack of capital and the Tata group’s reluctance to take risky bets meant that its consumer businesses have had problems scaling as well. Arvind Singhal, chairman and managing director of retail consultancy Technopak labels Tata Group’s digital efforts a Rip Van Winkle story. “They woke up after years and decided, let’s talk about something exciting.”

Tata Neu is a solution to Tata’s problems.