On-demand autorickshaw aggregator Jugnoo has restarted its hyperlocal delivery business by re-launching its ‘Fatafat’ service. Starting its operations in Chandigarh, the delivery service will be launched in Gurgaon and the NCR region in June.
Chinmay Aggarwal, the co-founder of Jugnoo, told Medianama over a telephonic conversation that the company will be focusing only on Tier II cities and not metros, as Tier II & III cities have unlimited scope and potential in this area. He added that Jugnoo will expand the business to 15 cities in the next three months.
The service is currently restricted to delivering vegetables and fruits through the company’s network of autorickshaws, with a few auxiliary items like dry fruits and frozen products. The company buys the products from the mandis (local vegetable markets) in the morning and stores it in its warehouses, which is then be delivered by the autorickshaw drivers.
Jugnoo first started the Fatafat service in March last year and continued it for about eight months. The service was then used to deliver orders for products such as grocery from stores within the city. Jugnoo claimed that it had 200,000 registered users with Fatafat and it was carrying out 1,000 orders daily across 4 cities then.
Aggarwal said that the service was withdrawn for multiple reasons but did not cite them. He added that Jugnoo now has a higher density of autorickshaws and will be able to handle the demand better as it has streamlined the process. Jugnoo has also acquired ‘SabKuchFresh’ to augment procurement and logistics functions of fresh fruits and vegetables, the company said in a statement.
Aggarwal said that Jugnoo was essentially an autorickshaw aggregator and is increasing the autorickshaws’ utilisation. “We are adding more work for the autorickshaw drivers, who will be paid commission for the amount of work they are doing every day,” he said. The amount of commission will vary with different cities, Aggarwal said, without providing the number.
Talking about the viability of online grocery firms, especially given the failure of many in the past few months, Aggarwal stated that the business has already increased and Fatafat is already clocking 100-120 deliveries a day, despite its re-launch which happened less than a month ago. Also, since Jugnoo is the only company with this format of operations, Aggarwal believes the company has little competition and therefore will be profitable in this venture.
Jugnoo’s funding: Jugnoo, which started operations in 2014, claims its autorickshaw aggregation business to have expanded to 10,000 autorickshaws registered on its network in over 20 cities. In April, Jugnoo raised $10 million in series B funding led by Paytm, Snow Leopard and Rocketship.vc. The company had previously raised an undisclosed amount of funding from Paytm in November 2015 for 20% stake. In June 2015, Jugnoo raised $5 million in a series A round of funding from Snow Leopard with participation from Paytm. It had also raised $1 million from Rajesh Mathur, Vikas Taneja and Kirloskar Brothers among others, in a seed round of funding.
Developments in the online grocery segment:
– In April, the AskMe Group announced its has plans to expand Askme Grocery business from its current 38 cities to 80 cities by the end of this financial year.
– Earlier this month, online grocery delivery service PepperTap had shut down its grocery delivery operations across the country. It was founded in November 2014 and had raised $51.2 million in funding since its inception.
– In March, Amazon had launched an express delivery platform called KiranaNow, a pilot service to make everyday consumer products available to its users in Bangalore.
– Around the same time, Bangalore-based online grocery store BigBasket raised $150 million in a round of funding to expand its one-hour express delivery service and launch a marketplace for speciality stores.
– In February, e-commerce player Flipkart had shut down its grocery delivery service Nearby five months after its launch. The company had launched the service in October 2015 on a pilot basis and was delivering in Bangalore neighbourhoods.
– In January, another hyperlocal delivery service provider Grofers had shut down its services in 9 cities citing low acceptance and is operating in 17 cities now.
– In December last year, Spencer’s Retail, the supermarket chain owned by the Goenka Group, has acquired the online grocery store Meragrocer, in order to enter the e-commerce segment.