Hi Everybody,
I am neither an expert, mentor or a successful serial entrepreneur to comment on such big issues…However being an ecomm and hyper local aspirant I wanted to understand your views and share my views about the most talked segment of the startup ecosystem in India.
One may buy shoes once in a year, clothes once in a six months, smartphone(s) once in 6 months. However we all buy groceries daily, weekly, fortnightly or max once in a month. Then why are these grocery delivery apps are struggling to survive ?
(Image – done by me with paint 🙂 )
I firmly believe that grocery, veggies and fruits delivery business have a great potential and it should be successful. In fact these delivery services were part of a big project for which I left my job with ICICI Bank.
My take on this and recommended solution:-
1. Almost all the cities where these companies closed operations have 1-4 local players providing such services. These are mostly startups. These startups are doing reasonably good business and have a fixed set of customers. The number of orders may be small but they are getting orders on daily basis. Operations costs of these startups is very small as compared with Flipkart, Amazon, Grofers and PepperTap.
2. These big companies spend a few lacs to crores of rupees to set up and run ops… Major portion of which goes in salaries and promotions.
3. Why don’t they invest few lacs and appoint a manager to monitor ops and tech set up in these startups? They can always mentor these startups and may be in future take over or buy out it..
4. This will save their millions of dollars, risk of shutting ops. And the most important laying off of local staff which in recent times has given a bad name to startups..
Why do I think that Hyper Local and Home Delivery Services should be successful?
1. I am running Cakehunt.com in Ahmedabad since almost 3 years now. I started it with almost zero investment as I was not having anything to invest in it.
2. Along with cakes, we added flowers, chocolates and teddy bears also. Many times I delivered food, Fruits, Snacks and even a meetha paan too.
3. Now we have a rented office (16k pm), bought 2 two wheelers from the money earned, paying to a staff for almost 1.5 year now and taking my salary since Jan 2015 from the earnings of Cakehunt.com, have good (not too big) bank balance.
4. We spent zero on ads and promotions. We are growing month on month. Yes, the growth is not like the big names in startup community but we are happy with it. And, yes we do have plans to expand into other product segments in our field and other territories too.
The suppliers / merchants can happily give margins / cut to everybody who is giving them business. I have observed an App wala company, they do not take anything from the supplier and sell products at discounted rates. Then how will they earn ? Hyper local is for convenience to the customer and not only about discounts.
We have as many as 100+ customers who have opted for our services for more than 4 times and never asked for any discounts. They are getting services which they want.
There are many startups which are doing much better than us.. What they need is a little push in terms of funding and mentoring. These big companies can do it in much better way than anybody else. They have experienced staff, mentors and lots of funding to expand.
I wrote here whatever came in my mind… There may be few things which might not be practically possible. I would like to know your views. I am sure, like past, I am going to learn something from all of you.
Happy week!
Ashish S Parik, The Cakeman who delivers feelings…