Naveen Tahilyani Steps Down as Tata Digital CEO to Take Regional Helm at Prudential Plc

Naveen Tahilyani, appointed by Tata Sons Chairman N Chandrasekaran to lead Tata Digital, has decided to step down from his role after a tenure of 15 months.

He will be assuming the position of regional CEO at UK-based Prudential Plc. In his new role, Tahilyani will oversee operations in India, Africa, the Philippines, Cambodia, Laos, and Myanmar.

Prudential Role Begins July 29

Tahilyani is scheduled to join Prudential Plc on July 29. He will focus on managing the company’s health division. Prudential, headquartered in the UK, holds a 22% stake in ICICI Prudential Life and a 49% stake in ICICI Prudential Asset Management.

Earlier in March, Prudential had announced a health insurance joint venture in India with the HCL Group.

Second CEO Exit Since Inception

Tahilyani becomes the second CEO to leave Tata Digital since its inception in 2019. He had been brought in from Tata AIA Life Insurance, where he served as CEO for over three years.

Tata Digital, created to support Tata Group’s entry into e-commerce, has faced ongoing financial difficulties, with FY24 losses amounting to ₹1,201 crore on revenues of ₹421 crore.

Tata Neu Faces Persistent Struggles

The company has invested over ₹18,000 crore in acquisitions like BigBasket and 1MG and in building Tata Neu, a super app meant to unify the Group’s consumer services.

Despite the investment and anticipation surrounding Tata Neu since its April 2022 launch, the platform has not met performance expectations.

Customer engagement has remained low, and revenue benchmarks have been missed. The app continues to suffer from fragmented user journeys, especially during checkout.

Efforts at Integration Faced Resistance

Upon taking the helm in February 2024, Tahilyani was expected to streamline operations and unify the various digital entities. A longtime Tata executive, his appointment was a strategic move by Chandrasekaran.

However, attempts to align the distinct verticals reportedly encountered pushback. Business units were reluctant to relinquish control over their digital strategies, leading to a lack of cohesion and synergy across Tata Digital.

Mounting Financial Losses

Tata Digital’s financial performance has remained disappointing. As per filings, it reported a net loss of ₹5,553.11 crore in FY23, nearly doubling its FY22 loss of ₹2,945.01 crore.

These losses stemmed from high expenditure on technology infrastructure, marketing, and inventory.

Analysts point out that while creating a large-scale digital ecosystem is inherently expensive, Tata Neu’s failure to offer a compelling central use case has worsened the company’s financial situation.

A digital strategy expert observed, “Tata Neu is missing a ‘core use case’ that gives users a compelling reason to return.”

In contrast to WeChat in China, which built its multifunctionality on a messaging platform, Tata Neu launched as a commerce-first app. Without daily utility or a natural entry point, the app has failed to attract repeat users.

A Return to Insurance Sector

After serving a year as CEO and MD of Tata Digital, Tahilyani will return to the insurance sector, an area in which he holds over a decade of experience.

According to Prudential Plc’s official statement, he will oversee operations in India, Africa, Cambodia, Laos, and Myanmar and lead the company’s health vertical. His previous insurance role was as Non-Executive Director at Tata AIA Life Insurance.

Leadership Void and Strategic Uncertainty

Tahilyani had been selected by Chandrasekaran to drive Tata Digital toward profitability and digital synergy. In his early town halls, he highlighted a commitment to technology and profitability.

His abrupt exit could impact the ongoing turnaround efforts. The announcement regarding his successor is still pending.

Career Journey: From McKinsey to Prudential Plc

Tahilyani, an alumnus of IIT Madras and IIM Ahmedabad, spent over 17 years at McKinsey before joining Tata AIA Life Insurance in 2015. He had a brief stint at Axis Bank in 2020 before returning to Tata AIA the same year.

During his time at Tata Digital, Tahilyani made several key hires. He appointed Vinay Vaidya, formerly of Amazon, as CTO. Jairaj Sathyanarayana, with past experience at Swiggy and Amazon, was brought in as Chief Data and AI Officer. Satyam Mehra, formerly with Zomato, joined as Chief Strategy Officer.

Tahilyani’s departure marks yet another leadership shakeup in Tata Group’s digital ambitions, raising fresh concerns over the execution and viability of Tata Neu.