Grofers shuts down operations in nine cities
January 05, 2016
These cities were not bringing enough orders to sustain the push
The firm had launched a big television campaign in November 2015, hoping to get more traffic to the site, but the demand petered out in December.
The nine cities, a source said, were not bringing enough orders to sustain the push. The source added the company had started operations in these cities to avoid "disappointed customers" who would download the app after seeing the advertisements and get no service. "We thought they may give the app a bad rating, which would damage the reputation."
Employees in these cities have been offered jobs at other centres, "which have been doing good business", the source added.
According to the source, this is not the first time the company had to end operations in some cities and this might not be the last time either.
Earlier, the company had suspended operations for a few days in Gurgaon owing to "logistical problems", but the service was revived within a few days.
The Gurgaon-based company was a darling of investors after receiving a $120 million in the last round of funding, led by SoftBank. The round also saw the likes of Tiger Global and Sequoia Capital pump money into the company.
In earlier rounds, the company had raised $10 million from Tiger Global and it was the biggest competitor to BigBasket.
Grofers is currently operating in Mumbai, Delhi national capital region, Bengaluru, Pune, among others.
The company could not be reached for an official comment.
In September last year, LocalBanya had temporarily ceased operations owing to a fund crunch. The company has not resumed operations yet, but sources say the Mumbai-based firm is on a comeback trail.