“Initially it showed 10 minutes’ time for delivery. When a delivery partner was assigned, that became 50 minutes. The package finally got delivered in about 55 minutes,” said Venkatanarayan, who was disappointed by the experience.
It wasn’t just the late delivery that bothered him, recalled the engineer; he had also struggled to pay for the order. When he tried, the app took him to BBNow. “I expected that all the items I added in the Neu Flash cart would show up, but they didn’t. I had to search for each item in my list again and then pay,” he said, suggesting there were syncing issues.
Venkatanarayan tried Flash again but had a similar experience. He has now shifted to opening BBNow within the Tata Neu app instead of using Flash.
“What is the difference between BigBasket Now and Tata Neu Flash as both are delivering groceries in under 15 minutes,” Ashish Singh wondered on social networking platform X late last year.
Responding to the post, a Tata Neu executive said, “BBNow is a service by BigBasket that focuses on speedy delivery of groceries and home essentials, while Tata Neu Flash is Tata’s quick delivery service for groceries, electronics and much more.” (A look at the BigBasket app today reveals that apart from household essentials, it also delivers electronic and fashion items within minutes.)
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Not satisfied with the executive’s answer, Singh responded with a plea for clarity: “…you guys have so many options like BBNow, BBDaily, just BigBasket and now Neu Flash. This creates confusion because everything comes under Tata.”
A former senior executive at the company agrees. “Big Basket is a far better-known brand than Neu Flash. Who knows about Neu Flash? It is BigBasket that is seen to be competing with Zepto and Blinkit. I think it will confuse a lot of customers,” said T.N. Hari, an advisor at The Fundamentum Partnership and former chief human resource officer of BigBasket.
Tata Neu had been launched in 2022 by Tata Digital, inspired by the success of Chinese superapps WeChat and Alipay. The superapp concept integrates multiple services—payments, shopping, transportation, social networking, food delivery, and so on—within a single platform. Instead of downloading separate apps for each service, users can access everything within one app, making it convenient and sticky.
In line with this thinking, Tata Digital sought to provide a single window from which a user could order various products from companies within the Tata stable, including Titan, Croma, Tata CLiQ, and WestSide. However, the venture has struggled to find its footing owing to a clunky interface and cumbersome consumer experience.
The superapp certainly has potential. Market intelligence firm Sensor Tower estimates that Tata Neu has amassed 91 million downloads in India. However, it noted that the app’s growth has slowed over the past year, with downloads plunging 80% year-on-year (y-o-y) in 4Q24 (October-December). Monthly active users are currently down 20% y-o-y in the ongoing 1Q25.
In a bid to breathe new life into the app, Tata Digital is betting big on quick commerce, a market that is currently an oligopoly controlled by three outfits, to breathe new life into its superapp ambitions. Late last year, it rolled out Tata Neu Flash, bundling groceries from BigBasket, medicines from Tata 1MG, fashion from Tata Cliq, and electronics from Croma. It promised speedy delivery and is piloting the service in selected pin codes across 20 cities. While Tata Digital hasn’t officially talked about the launch yet, the service, powered by BigBasket, is available on the Tata Neu app.
But even with the group’s existing infrastructure, can Neu Flash match the seamless experience of a Blinkit or an Instamart? And with BigBasket and its quick commerce service BBNow still in the picture, what’s the long-term vision?
Execution challenges
When it was conceived, Tata insiders believed Neu would be a killer app. “The genesis of the idea was: We have so many consumer companies and so much data. If, theoretically, we add up all subscribers of Tata Sky, Tata Power, all the buyers of Westside, Titan… the core companies… it comes to a 40-50 million consumer user base. Could we supercharge a business with this number,” said a former senior executive of the company.
Then somebody realized that these were not high-frequency categories, and so Big Basket and 1MG were purchased to fit into that theory, the executive claimed. Soon after, the company introduced Tata Neu as the front end, offering a group-wide loyalty programme to acquire customers and make the idea work.
Tata Neu has its fans. “Even before Big Basket was acquired by Tata, I was a fan of Taj Hotel and a Taj Inner Circle member,” said K. Ganesh, Serial Entrepreneur, Author and Adjunct Professor, IIMB & ISB. “After Tata Neu, I could get points on a Taj Hotel stay and redeem them seamlessly through a grocery purchase. My grocery purchases were almost free because of the number of points I used to earn on Taj Hotel.” Ganesh has been a promoter in various new-age companies, including BigBasket.
But the absence of a core service to retain customers has hindered the app, said Satish Meena, founder of Datum Intelligence, a research company. “There is no clear positioning of Tata Neu for the customer in terms of what they are offering. Why should a customer login to Tata Neu twice or thrice a day,” he wondered.
There is no clear positioning of Tata Neu for the customer in terms of what they are offering. Why should a customer log in to Tata Neu twice or thrice a day
—Satish Meena
Tata Digital did not respond to multiple requests from Mint for an interaction or share responses to a detailed questionnaire sent over email.
To be fair, Tata Digital is not the first company struggling to make a superapp work. Over the years, many businesses have tried and failed. China’s WeChat and Alipay were founded in the 2000s when real estate on phones was a luxury and the idea of one app for everything was tempting. Now, phones come with large storage and processing power, making the idea almost irrelevant.
Why Flash?
A compelling reason for a superapp to succeed is frequency, and quick commerce is the king of frequency. According to analysts and former executives, quick commerce with Flash combined with Tata Digital’s focus on fintech are aimed at finally making Neu click. Tata Neu CEO Naveen Tahilyani, who joined the company in February last year, is a fintech veteran with over two decades of experience in financial services.
In the fintech space, Tata Neu expanded into retail investments early this year with the launch of a fixed deposits (FD) marketplace. Customers can invest in FDs with financial institutions, even without having a savings account.
These products add to Tata Neu’s current fintech portfolio, which includes cobranded credit cards (Tata Neucard), UPI, Insurance, BNPL options (Tata Pay Later), digital gold investments, and personal loans offered in partnership with financial institutions. The company has also been exploring stock trading and mutual fund investments.
In the quick commerce space, industry analysts believe Tata Digital, which was late to 10-minute delivery of groceries, does not want to repeat that mistake. Fashion and electronics are still at a nascent stage in the quick commerce space, they noted. None of the contenders—Blinkit, Zepto and Instamart—has really scaled either category, giving Neu an opportunity.
“They want to run this experiment before others figure out how to sell fashion or appliances. For Blinkit, almost 3-4% is electronics or small appliances and around 3-4% is fashion or dailywear. It’s still very early for them,” said Meena.
Small basket
Big Basket takes care of the backend operations for the quick delivery service Flash while Tata Neu is at the front end, with more categories. But while BigBasket has the last-mile reach and delivery network, it is heavily into groceries, so stocking is very different, said Sreedhar Prasad, former partner at KPMG and a startup advisor.
BigBasket has 700 dark stores and operates in 250 towns and cities under four models: BigBasket ecommerce, BBNow, BBSlotted, BBDaily. Industry experts say it will be challenging to run all the models and Neu and it may have to kill or merge some of them.
Officials at BigBasket, however, asserted to Mint that there are no plans to close any service. “What has changed is that we have transformed the bigbasket app interface to reflect the fact that 10-minute delivery is now at the core of our service offering.”
Multiple BBDaily customers told Mint that in the last few months, their experience has been inconsistent, sometimes leading to no delivery.
But delivery isn’t assured. Multiple BB Daily customers told Mint that in the last few months, their experience has been inconsistent, sometimes leading to no delivery. They are always refunded in full when that happens.
In response to Mint’s queries, the company said, “BBDaily’s key operational metrics, namely on-time delivery and fill rate, have actually improved in the last six months. While some delivery-related issues may exist from time to time, we are continually working to minimize these instances to provide the best customer experience.”
Despite operating in around 50 cities and towns, and being backed by over 500 dark stores (see graphic), BBNow, the quick commerce division, has withered in the face of intense competition from Blinkit, Zepto and Swiggy Instamart.
According to a report by brokerage JM Financial, in the fourth quarter of calendar year 2023, Blinkit had a 46% market share, followed by Instamart with 27%, Zepto with 21%, and BB Now with 7%. Since then, BBNow, which started out in a big way in 2022 after a soft launch, appears to have lost considerable ground.
A report by brokerage Motilal Oswal stated that in the first quarter of this financial year, Zomato-owned Blinkit held a 46% share in the quick commerce market, followed by Zepto with 29% and Swiggy Instamart at 25%. Together, the report suggests, they control 100% of the market. But a note adds: “We also pencil a 2% market share for new entrants; these will likely be inefficient as compared to the three leader[s] mentioned above, but will have a small role to play nonetheless.”
In a recent review of Tata Digital’s businesses, Tata Sons, the holding company of the Tata group, expressed dissatisfaction with the grocery delivery arm’s underwhelming performance as competitors captured market share, according to a report in The Economic Times.
Clearly, for the Tatas, the main hurdle is to lure customers on to the Neu Flash platform, especially those who have been enjoying a smooth experience with the quick commerce oligopolists.
They may have cornered the market, but Blinkit, Zepto and Instamart have burnt through a lot of cash to do so. That cash burn remains high owing to the soaring costs associated with customer acquisition, operations, and logistics. Speaking to ET recently, Zomato founder Deepinder Goyal said that the total burn for all quick commerce companies would conservatively be about ₹5,000 crore per quarter. He added that more than half of this is by Zepto. However, Zepto founder Aadit Palicha refuted this claim in a LinkedIn post.
Tata Digital’s balance sheet is also far from healthy. While revenue has grown, its cash burn remains high. In FY24, the company’s revenue almost doubled to ₹421 crore while its losses narrowed from ₹1,370 crore in FY23 to ₹1,201 crore.
The Tata edge
The distinct advantage that the company has is that it will be delivering products from the Tata stable, leaning on BigBasket dark stores and the retail outlets of group companies.
“You have a deep inventory of products, which other players don’t. They need to tie up with third parties for every category. So, the business model is a lot more feasible for the Tatas to pull off,” explained Ganesh.
The inventory carrying cost is split between the physical store and the quick commerce operation, said Ganesh. Typically, the inventory carrying cost has to be recovered by the quick commerce company.
Another advantage is the omnichannel experience the company can offer by giving the customer the option to pick up a product at a retail store, ask for a demo or just physically verify it. That matters when a customer buys a big-ticket appliance such as a microwave or a television.
Retail stores also have space constraints, so digital sales help. “There is the concept of an endless aisle versus a constrained aisle. So, real estate players will always be in a constrained aisle because they have only this much space to keep their stuff. E-commerce players will always be in an endless aisle,” a former executive explained.
In theory, Tata Neu has a lot going for it. How Tata Digital executes its new gameplan will dictate if the superapp finally comes into its own.
