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India’s e-commerce giant Flipkart is shutting down its hyperlocal grocery delivery app, less than five months after its launch
What the hell is up with India’s food delivery sector?
First we saw hyperlocal delivery startup Grofers shut operations in nine cities due to poor reception. Following that, restaurant discovery and food delivery startup Zomato called it quits in four cities. Days after, yet another hyperlocal delivery service PepperTap shut its doors in six cities.
Now, it appears even ultra successful startups are not immune to this curse. Today, India-based e-commerce giant Flipkart (valued at US$15 billion) announced it was killing off its hyperlocal grocery delivery Flipkart Nearby. This news comes less than five months after it was launched.
The app purportedly allowed users to order a wide variety of groceries and food, and have it delivered within an hour. It was only available in the city of Bengaluru from 10 am to 8 pm.
While Flipkart did not disclose the official reason for the closure, a report by Mint said that customers weren’t biting and there was a low margin. In addition, Flipkart did not pursue extensive marketing campaigns as the project was only a pilot.
Also Read: Alibaba to pump US$1.25 billion in Chinese online food delivery service Ele.me
Narrowing down on key objectives
The report also says the move falls in line with newly appointed CEO Binny Bansal’s strategy to cut costs and focus on the company’s core strengths: electronics and fashion sales and logistics.
In the e-commerce space, Flipkart is engaged in a drawn-out battle between Amazon India, Paytm as well as Snapdeal.
In yet another announcement today, Flipkart said that it plans to ramp up technological upgrades to boost its online mobile and desktop capabilities. This will involve hiring talent in the big data and machine learning department. This move may have also contributed to the cut in funding to Flipkart Nearby.
For India’s tech-enabled food delivery industry, dark clouds loom ahead.
Also Read: Once VCs’ favourite dish, has Indian foodtech bitten off more than it can chew?
The post India’s food delivery startups are in a state of rot; Flipkart Nearby closes shop appeared first on e27.
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