Tata Group to Enter Food Delivery Segment; Challenge Swiggy, Zomato

According to a MoneyControl report, Tata Group is said to be gearing up for an entry into the online food delivery industry.

Utilizing the government's Open Network for Digital Commerce (ONDC), Tata's 'super app', Tata Neu, aims to launch its own food ordering service. The report, referencing four informed individuals, highlighted these upcoming developments.

The Tata Neu app currently features a food category section, displaying menus exclusively from restaurants affiliated with the Tata Group's hotel company, which operates the Taj brand.

The report suggests that integrating with ONDC could enable the app to access a wide range of eateries across various cities already connected to the network.

As per the report, Swiggy and Zomato dominate over 95 percent of the food delivery market. Additionally, the two companies collectively processed nearly USD 6 billion in gross order value during the fiscal year 2023.

According to the report, Gaurav Porwal, a senior vice president at Tata Digital, is spearheading the ONDC initiative at Tata Neu.

This branch of the conglomerate also encompasses acquired consumer internet ventures such as the online grocer BigBasket and online pharmacy 1mg.

The report indicates that Tata Neu will function as a buyer-side application within ONDC, operating in the business-to-consumer capacity.

This approach is anticipated to make its foray into food ordering cost-efficient, as it won't require deploying a fleet of delivery riders or persuading restaurants to list on the app.

In the government-supported network, a single entity isn't required to manage every aspect of an e-commerce transaction independently.

Various participants can handle customer orders, logistics, and merchant onboarding collectively.

The report further mentioned that Tata Neu is collaborating closely with Magicpin, supported by Zomato, for its ONDC integration.

This Gurgaon-based startup is assisting the company as a technology service provider for the front end.

Magicpin has also aided other firms, including fintech leader Paytm and ride-hailing service Ola, in integrating with ONDC.

Additionally, Magicpin holds the distinction of being the foremost seller-side platform on ONDC with regard to restaurant enlistment.

The startup has successfully onboarded over 50,000 eateries onto the network. Magicpin fulfills three roles within ONDC: technology service provider, seller-side application, and buyer-side application.