Tata Digital CEO Exit: Tata Neu’s Turnaround Story Continues To Remain On Tenterhooks

Tata Digital, the embattled venture of Tata Group which operates its ambitious super app Tata Neu, continues to struggle. In a fresh setback, its Chief Executive Officer, Naveen Tahilyani—who was brought in with hopes of engineering a turnaround—has now stepped down from his role, further clouding the future of the much-hyped platform.

Tahilyani is set to join Prudential Plc as the regional CEO for India, Africa, the Philippines, Cambodia, Laos and Myanmar, with responsibility for health insurance, the British insurer said in a statement.

With Tahilyani’s exit, Tata Digital has now had two CEO exits, with his predecessor Pratik Pal stepping down just about a year ago in February 2024. Pal was at the helm of operations since the initiation of Tata Neu in 2019, which did not see immediate success under his leadership.

Post this, Tahilyani, was handpicked by Tata Sons Chairman Natarajan Chandrasekaran. Tahilyani came in from the world of insurance, after his previous stint as CEO and Managing Director of Tata AIA Life Insurance Co.

Tata Neu is essentially India’s first super app which houses Tata’s existing and acquired entities, from Croma to Cliq to Big Basket to 1MG. Since its inception, the app has received criticism for lack of customer retention. Its interface has been described as inconvenient and its key use case as being unclear, as the offerings included under the app are extremely diverse, and have no natural entry point for users.

The alignment of all the brands under the umbrella app has also been a pain point for the company, as individual businesses have been reluctant to share autonomy. At the core, the super app approach itself has been criticised, as not many players in the digital commerce space have been able to crack it, like companies in other countries have been able to. For instance, China’s WeChat, which has been one of the success stories in the category.

With this, the overall awareness around Tata Neu is also an issue. Four years since its launch, a majority of consumers are not aware of the app and its use case still. Some of the portfolio companies under the umbrella, are also a drag, as they fall behind their peers and are far away from being market leaders.

For instance, platform Big-Basket, a late entrant to the quick commerce category has not caught up with its peers Blinkit, Instamart, and Zepto.

Tata Digital in FY23 widened its loss to Rs 5,553 crore from Rs 2,945 crore in FY22. This is despite the multiple rounds of investments that Tata Group has done in its digital commerce arm. The company has also actively tried to strengthen its brand presence with IPL sponsorships.

Top deck churn at the company has also been an ongoing concern, with multiple exits being seen in the last couple of years. In addition to Pal’s exit, Mukesh Bansal, the co-founder of Myntra and CureFit who was bought in to strengthen branding, and was named the president of Tata Digital in June 2021, also stepped down from his role in 2023.