Hyperlocal grocery delivery app Grofers, has shut delivery operation in nine cities, where it started a pilot in September last year, as sales in these locations failed to garner traction.
The cities where it has decide to stop services include Bhopal, Bhubaneswar, Coimbatore Kochi, Ludhiana, Mysore, Nashik, Rajkot and Vishakhapatnam.
“These few cities were a part of our experimentation and we wanted to know how these markets respond to our offering. We are currently re-assessing our operations in these cities, and will be temporarily closing down our services,” Aditi Khare, Manager – Marketing Communications & PR, told Indiaretailing.
“Smaller cities are not ready for the hyperlocal business yet. Once they are, we will reconsider our strategy. Meanwhile, we are refocusing our business in select key markets that continue to show high growth,” she added.
In November last year, Grofers raised USD120 million in funding from Japan’s SoftBank Corp., Russian entrepreneur and venture capitalist Yuri Milner and existing investors Tiger Global and Sequoia Capital.
After burning cash on customer acquisition and discounts last year, online food retail and services firms are now focusing on improving the efficiencies of business. In September last year, LocalBanya had temporarily ceased operations owing to a fund crunch. The company has not resumed operations yet, but is reportedly on a comeback trail.
Grofer’s competitor Peppertap also said that their current focus is on consolidating their businesses rather than expansion.
After the roll back, the company is now operational in 17 cities, which include Mumbai, Delhi national capital region, Bengaluru, Pune, Chennai, Chandigarh, Hyderabad, among others.