Hyper-local grocery delivery service PepperTap has shut down operations in six cities: Mumbai, Kolkata, Chennai, Ahmedabad, Chandigarh, and Jaipur. It will additionally layoff about 400 delivery personnel, the company informed MediaNama. PepperTap will continue to operate in Delhi, Gurgaon, Hyderabad, Pune, Noida, Bangalore, Ghaziabad and Faridabad, according to the spokesperson.
Focus on ‘depth rather than breadth’
In a press statement, Navneet Singh, CEO of PepperTap said that “…Given the short to mid-term investment climate outlook, we have decided to focus on depth rather than breadth. We are digging our heels in for the long term….” According to Singh, the service claimed to deliver almost 40,000 orders in a single day in 2015. Previously, the hyper-local service had suspended operations in smaller towns like Agra and Meerut, after a month-long pilot failed to gain traction back in September last year.
In December, the company raised $4 million from Innoven Capital, and acquired Bangalore-based hyper-local grocery delivery service Jiffstore. So far, it has raised $51.2 million in 4 rounds of funding from at least 8 investors. The company told MediaNama last month that it plans to diversify its catalog as per the exact demand of products in a particular area.
$2-3 million spent on advertising
Hyperlocal services have been reportedly spending less on discounts and marketing activities, with shifting focus towards building a sustainable business model rather than profitless scaling up. Both Grofers and PepperTap spent $2-3 million in advertising initiatives, during the September-December 2015 quarter, reports Livemint.
In October, PepperTap tied up with cloud telephony company Exotel to introduce number masking on its mobile app. The user’s number would not be visible to delivery personnel, and routed through Exotel’s server.
Other services which shut down in parts:
– Grofers had also suspended its operations in nine cities: Bhopal, Bhubaneswar, Coimbatore, Kochi, Ludhiana, Mysuru, Nashik, Rajkot and Visakhapatnam, last month. In November, Grofers had secured $120 million from SoftBank and existing investors Tiger Global and Sequoia Capital.
– Zomato shut down online ordering operations in 4 cities; Lucknow, Indore, Cochin and Coimbatore citing that the size of the market in these cities accounted for less than 2% of its order volumes thus leading it to shut down operations. It mentioned that it will relaunch in these cities in the future and will currently continue listing restaurants and offering scanned menus in these cities.