New Delhi/Bengaluru: Ola, India’s largest taxi-hailing service will shut down its grocery (Ola Store) and food delivery services (Ola Cafe). As per report the company slows expansion plans and struggles to build customer demand for the business units and huge delivery costs is the main reason behind this move.
“It (grocery) is not a profitable business and has huge delivery costs,” said one of the two people cited above, requesting anonymity.
While Ola Store currently operates in Bengaluru, Hyderabad and Gurgaon, Ola offers its food delivery services in Mumbai, Bengaluru, Hyderabad and Delhi.
Investors have poured more than Rs.800 crore into online grocers and delivery firms over the past two years.The food and groceries market in India, which is estimated to touch $480 billion in 2020 by India Brand Equity Foundation, has also drawn the attention of online marketplaces.
In a separate interview on Tuesday, Ola’s newly appointed chief financial officer Rajiv Bansal stressed how the company wants to create a sustainable business model. “We want to maximize on our strengths as much as possible. But I think that beyond a point it will be an execution challenge. We just don’t want to grow by launching new things and not adding value to the consumer. The demand is unlimited. There will be constraints around supply, government and execution in general. Ola and TaxiForSure together have 78% of the market share. We want to retain and expand our market share,” said Bansal.
Ola’s cab-hailing platform has over 275,000 cabs and 75,000 auto-rickshaws, apart from kaali peeli Women’s Viagra for Sale taxis and yellow taxis in 102 cities in India. (Source)