The Tata Group’s digital venture, Tata Digital, is facing a significant leadership crisis with the departure of its Managing Director and CEO, Naveen Tahilyani. This marks the second CEO exit in just over a year, highlighting the company’s struggles to stabilize its operations and execute its vision for its super-app platform, Tata Neu. Tahilyani, a Tata Group veteran, took over the reins in February 2024 but has now stepped down to take on a broader international role with Prudential Plc.
Tata Digital has yet to name a successor, leaving the company’s future uncertain. The departure comes at a critical juncture for Tata Digital, which has been under pressure to demonstrate progress with Tata Neu. Despite significant financial backing of $2 billion, the app has struggled to gain traction among users, missed revenue targets, and failed to present a coherent customer experience. The company’s attempts to bring alignment among its disparate businesses, including Croma, Tata Cliq, CaratLane, and BigBasket, have faced resistance, resulting in a disjointed experience for consumers.
Financially, the strain is evident, with Tata Digital posting a widening loss of Rs 5,553.11 crore in FY23, nearly doubling from the previous year. The company’s cost-heavy approach to building its ecosystem from scratch has been cited as a major contributor to the losses. Experts argue that the fundamental issue is the absence of a core use case or loyal customer base that binds Tata Neu’s services together. Unlike WeChat, which succeeded by building upon an existing social messaging user base, Tata Neu began as a commerce-first platform without a natural entry point or core proposition to keep users engaged.
The leadership shakeup and ongoing struggles at Tata Digital have raised concerns about the company’s ability to stabilize its operations and achieve its goals. The departure of Tahilyani, who was handpicked by Tata Sons chairman N Chandrasekaran to steer the company back on course, has added to the uncertainty. As the company searches for a new CEO, it will need to address the underlying issues plaguing its digital venture and find a way to create a cohesive and engaging experience for its users.