TATA vs Reliance Business War: How TATA NEU App's BUSINESS MODEL will change the game for TATAS? thumbnail

TATA vs Reliance Business War: How TATA NEU App’s BUSINESS MODEL will change the game for TATAS?

Hi everybody on 7th of april 2022 the tatas officially launched the tata new super app and ever since they made the announcement even before the launch it had been making headlines every single week and not just that this super app market seems to be so lucrative that it's not just the tatas but even the ambanis and.

Adanis are all set to enter this giant space so practically three of india's biggest business houses will be competing with each other to become a market leader in yet another trillion dollar market in india so in this episode today let's try to understand what exactly is the tata new super app all about what is so special about the.

Super app model that these business houses are pouring in hundreds of crudes for and as usual as students of business what are the study materials that we need to study in order to understand the super app market better to begin with first let's try to understand where and how did the super app model emerge and how did super apps.

Actually become super powerful people the super app saga has been going on since 2009 china this is when china was establishing something called the great firewall the list of foreign websites that are blocked in china is long and growing the site had become yet another casualty of the great firewall of china facebook had been censored as census.

Maintain a tight grip of what can and cannot be published online to eliminate anything seen as a threat to the ruling communist party both facebook and twitter meanwhile were blocked as rioting broke out in xinjiang a province in the far west of china last summer china has become a massive internet market since google left and many local.

Rivals capitalized its departure some analysts also believe that the blocking of foreign sites is done to give domestic competitors an edge long story short using great firewall china basically blocked the american websites like google facebook and twitter now why did this happen because the government felt threatened by how.

Much power these organizations can actually practice or the people of china by having their data so they started nitpicking just to ban them one by one for example facebook is accused of facilitating communication between protesters during a deadly riot in western china whereas google was banned due to sponsorship on search queries and.

As you can imagine one fine day in china there was no google and no facebook and as a result of this three things happened in the chinese market number one by the time this ban happened the chinese people had already gotten habituated to the digital ecosystem the number of smartphones produced in china had already skyrocketed and millions of.

Chinese had already gotten used to these american websites number two since the american websites were banned there was a big lachna left in the market because of which the chinese market desperately needed replacements to fill in the gap of facebook google and twitter and lastly although the chinese people needed.

Replacements the phone market of china was still in its baby stages so most of the smartphones they had they did not have a large amount of storage which means what there was a huge gap left in the market and yet there was a big constraint of space this is what prompted the chinese companies to set up and create services.

For china but at the same time because of the space constraint they had to actually club in multiple services in a single app and this is where ladies and gentlemen the concept of super apps was born and the company that pioneered this wave was a company called tencent and the app they launched was none other than wechat.

Now if you look at how which are actually capture the chinese market you will very clearly be able to understand how do these super apps actually emerge and in this case it's very very clear and strategic firstly just like microsoft built an irreplaceable product with windows operating system wechat deeply got embedded into the.

Chinese lifestyle with a messenger service and just like whatsapp did in india wechat first became a leading messaging app with free calls free messaging and free video calling features then soon enough in phase 2 they started introducing a feed like facebook and evolved into a social media app.

This way they could collect massive amounts of data about consumer preferences and they could also show ads and once this network effect was established in phase 3 just like whatsapp again wechat introduced the payment feature that was a game changing move in the chinese market now most people will ask why is a payment feature.

A game changing app well that is because now wechat can both act as an advertiser like facebook with its feed and a payment processor with its payment feature which means what people could actually watch an ad of a handbag on wechat and actually pay for that handbag using the exact same app and if you're a digital marketer you.

Already know how valuable this reduction in friction for payment is and at the same time you also know how big the impulse buying market is and not so surprisingly the revenue shot up conversion for ads shot up and billions of dollars of revenue started flooding into wechat and lastly wechat hit a home run by incorporating e-commerce into the.

Exact same app and using this feature not just sellers but even small businesses could actually open their account and collect payments from their customers this insane level of tight and close-knit integration made wechat such an integral part of the chinese life that it almost started acting like an operating system in itself with social.

Media instant messenger e-commerce and payment network all of it integrated in a single freaking app and today wechat has achieved an extraordinary base of 1 billion monthly users now although this might look like random diversification to you what is important to note over here is that the bazooka that exploded wechat in china is the.

Seamless integration between payment features and social media this is how the super apps actually evolve they first create a product that gets deeply embedded in your life they collect massive amounts of data offer payment services to bridge the gap between two services and then start integrating more and more services together which.

Eventually turns that app into an irreplaceable product now the question is is it so obvious that these super apps are going to be a massive hit in india also well not really because there's a huge difference between the chinese ecosystem and the indian digital ecosystem so keeping all of this in mind let's first.

Try to understand what exactly is the difference between the chinese digital ecosystem and the indian digital ecosystem first of all while chinese people have proven to like generic products the indian audience has always proven to prefer a specialized product for example if you're used to using phone pay i'm sure many of you got a.

Prompt to use whatsapp pay also but my question to you is how many of you actually went through the friction of actually getting onboarded with whatsapp pay similarly because china banned facebook people had to shift to wechat but here in india there is very less go for a social media app in fact in india we are so specific that we use snapchat.

Whatsapp and instagram all three of them together for three different specialized purposes and lastly we indians have often proven to move away from the app if it turns generalized for example facebook has a marketplace integrated within itself and yet hardly any of us use it instead we have specialized apps like me show olx and amazon which are.

Literally three different sub types of marketplaces therefore disrupting the existing leaders in their category in india is going to be very very challenging because the obstacle to acquire users in india is reluctance and fun fact is that other than in china not a single company in the world has been able to develop a fully operational.

And successful super app model a classy example in india is paytm which actually tried to become a super app but ended up eroding its existing customer base instead so now the question is when the stats indicate failure why are reliance on the tata so keen on getting into this model well that is because both the tatas and.

Reliance are not starting a super app from scratch instead they are bringing in all the specialists and market leaders under one roof to create an ecosystem of offering this is where their acquisition strategy and conglomerate factor comes into play in case of the tatas we saw that in the form of tata neo super app this is.

Because tata already has companies in dozen industries including hospitality jewellery fashion and airlines apart from that they have big basket in which last year tata digital acquired a majority stake and then we've got the retail shield chroma entertainment service like tata play the tata click app i had c lender tata hotels and then.

We've got starbucks that is a joint venture with the tatas in india apart from that we've got curefit coming up where tatas are to invest 75 million dollars and then we have 1mg now the question is like we saw most of us didn't use whatsapp in spite of it offering us payment features we didn't use facebook in spite of it offering.

E-commerce and marketplace features then what is so special about tata new that people will actually use it well the answer to this lies in this book called hooked and if you remember from our pubg video we spoke about users getting rewarded for the action that results into an investment in this case the catch over here is something called.

New coins where one new coin is equivalent to one rupee and here's an oversimplified model of how it will work out now mind you people this is a theoretical model in practice this might be executed differently and it will also evolve with time differently but at the end of the day the skeleton of this is going to remain the same so let's try to.

Understand this first and foremost tata new will give out unbelievable discounts and cashback to make you download the app so if you buy 2 500 rupees worth of products from big basket you might get 125 rupees worth of new coins then using these new coins you can get a 125 discount at 1 mg when you buy medicines apart from that once you integrate your.

Accounts with tata new it will start pulling out the data from all of your past purchases then give you new coins for your past purchases and give you a discount now for your present purchase in fact as per a test user while she was buying a tv from the tata new app the app actually pulled up rewards from a taj stays her big basket buys her tata.

Click purchases and all of it put together gave her a discount of 10 000 rupees instantly and if you see closely this is the advantage that only the tatas and reliance have that many cannot even think about building from scratch and if this goes well there are four incredible superpowers that tatas will have once tata new goes mainstream and.

This applies also for the amani's and the adanis number one from the business standpoint they have a wealth of user data that helps them upsell and cross send multiple products to the same customer and eventually earn more secondly this opens up a huge avenue for digital revenues eventually they can learn from advertisers from partner.

Brands and even can earn commissions just like amazon does number three tomorrow if the tatas acquire another company or a brand they will seamlessly be able to integrate the company within the tata new app and lastly if the super app is successful it will have one of the highest customer lifetime value in the entire ecommerce space which means.

What once the customer gets associated with the company they might end up spending lacks of rupees during the usage of the tata new app and now from the consumer standpoint most of us are tata customers directly or indirectly so now with tata new we could actually be rewarded for our loyalty and secondly the customers will.

Actually save a ton of phone space and internet usage could become simpler now whether this is going to be super successful or if it's going to flunk like paytm only time will tell but until then let's move on to the most important part of the episode and that are the study materials to help you understand the super apps market both in india and.

China but before we move on i want to thank our partners small case for supporting our content people if you're someone who loves the tatas as much as we do you can use a small case app to invest into the best data companies by opting in for the house of tata small case small case is this wonderful app that designs a basket of stocks to help.

You make the best investments in any market conditions and the best part is that the small case manager will automatically rebalance the stocks as per the market conditions to give you the best returns possible and even if you do not want to invest you could use my favorite feature in this app and that is the new section and the newsletters.

So that you get the latest market updates about the most important happenings in the market so if you love the idea go ahead and download the small case app from the link in the description moving on to the study materials the first thing you need to read about is the evolution of super apps in china and for this i am.

Attaching an hbr article on wechat that will help you understand why it actually became successful the second material that i am attaching is the document on how alipay intends to become the next big super app and when you read both these cases try to spot the difference in their approach and more importantly see how the trajectory of the tatas and.

Reliance is actually different from their chinese counterparts and lastly i am attaching an ink article that will actually give you an overview of two upcoming super apps from the adanis and ambani's so go through them and do let me know about what you think about in the comments section and before we say goodbye think school is now available in.

Tamil and telugu so if your parents or your friends wanted to listen to these business case studies in their own regional language because they were not comfortable with english do share those channels with them and do support us in our journey to provide world-class education to the grassroots of india that's all from my star today guys if.

You learned something available please make sure that the like button not make youtube bubba happy and for more such insightful business and political case studies please subscribe to our channel thank you so much for watching i will see you in the next one bye bye.

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