India’s third-largest grocery delivery service is no more.
On April 22, PepperTap, a 17-month-old Gurgaon-headquartered startup, said it will shut its grocery delivery operations. Promoters Navneet Singh and Milind Sharma, who had earlier worked together at logistics startup Delhivery, will now focus on expanding PepperTap’s own logistics business.
Founded in November 2014 by Singh, an Indian Institute of Management-Ahmedabad graduate, and Sharma, PepperTap was built to deliver groceries from local stores to neighbourhood customers within two hours. Orders could be placed through the company’s mobile app or website.
Like most business-to-consumer (B2C) startups in India, PepperTap was in hyper-growth mode in the first year of its life. By October 2015, the company had expanded business to 17 cities and was delivering an average of 20,000 orders per day. Operating on an inventory-less model, the startup was capital-light.
Groceries gone bad
In any case, India’s online grocery delivery market is an excruciatingly tough one to crack. PepperTap’s closure is just more proof.
In January, Grofers—backed by SoftBank, Sequoia and Tiger Global—pulled out of nine markets, saying “smaller cities are not ready for hyperlocal business yet.”
India’s $383-billion food & grocery industry—largely run by traditional mom & pop stores, with a smattering of large brick & mortar and online retailers—typically operates on margins ranging between 5% and 10%. For online delivery services such as Grofers and PepperTap, they are even lower.
Source
On April 22, PepperTap, a 17-month-old Gurgaon-headquartered startup, said it will shut its grocery delivery operations. Promoters Navneet Singh and Milind Sharma, who had earlier worked together at logistics startup Delhivery, will now focus on expanding PepperTap’s own logistics business.
Founded in November 2014 by Singh, an Indian Institute of Management-Ahmedabad graduate, and Sharma, PepperTap was built to deliver groceries from local stores to neighbourhood customers within two hours. Orders could be placed through the company’s mobile app or website.
Like most business-to-consumer (B2C) startups in India, PepperTap was in hyper-growth mode in the first year of its life. By October 2015, the company had expanded business to 17 cities and was delivering an average of 20,000 orders per day. Operating on an inventory-less model, the startup was capital-light.
Groceries gone bad
In any case, India’s online grocery delivery market is an excruciatingly tough one to crack. PepperTap’s closure is just more proof.
In January, Grofers—backed by SoftBank, Sequoia and Tiger Global—pulled out of nine markets, saying “smaller cities are not ready for hyperlocal business yet.”
India’s $383-billion food & grocery industry—largely run by traditional mom & pop stores, with a smattering of large brick & mortar and online retailers—typically operates on margins ranging between 5% and 10%. For online delivery services such as Grofers and PepperTap, they are even lower.
Source
