Table of contentsPepperTapThe reasons for the fallWhat could have been donePepperTapPepperTap was an on-demand hyperlocal grocery delivery startup based in Gurgaon (Gurugram). PepperTap started its journey in November 2014, by Navneet Singh and Milind Sharma. PepperTap was launched with a vision to revolutionize grocery shopping; No more queues, No more parking hassles, No more negotiations with sabzi-wallahs. They worked on a “100% inventory-free” model, where they purchased existing inventory from local stores online on their app. They are off to a good start, operating in around 31 cities and processing an average of 20,000 orders per day. They have become one of the largest players in India in the online grocery delivery business in just one year. They have raised a total of $51 million from various investors like Sequoia Capital, Saif Partners, Snapdeal, etc. within 15 months following their operation. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay AutumnIn September 2015, the company closed its operations in Agra and Meerut after a month of testing. PepperTap entered Tier III cities to test the waters and found that it was not profitable and had to quickly exit the market before losing a lot of money. In February 2016, PepperTap shut down operations in 10 cities, including metros like Mumbai, Chennai and Kolkata, and laid off around 400 employees to cut costs. They focused only on cities like Delhi, Gurgaon, Noida, Hyderabad, Pune, Ghaziabad, Faridabad and Bangalore, which accounted for 70% of their revenue. Finally, in April 2016, PepperTap shut down its cash-burning grocery delivery business. Their app integration with their partner stores wasn't great, sometimes customers couldn't see a store's entire selection of items and sometimes even essential items were missing from the catalog visible to them. founder Navneet admits, “In the race to spice up the whole country with PepperTap, we had brought too many stores online way too quickly.” And they didn’t plan to scale the product and operations accordingly. Discounts E-commerce in India has a brand that has to be cheaper than the physical store for people to buy it. To continue enticing customers to purchase on their platform, they spent a lot of time and energy designing smart sales and discount programs. To reach a loyal customer base and get ahead of the competition, they were unrealistically spending money on discounts, burning through their bank balance. The PepperTap business model worked on a “100% stockless” model, which means the company has to pay for the MRP from local sources. stores; bear the costs of delivery, technology, operation, etc. while offering the products at reduced prices to its customers. There is no way PepperTap can achieve profitability. For example, the startup raised $51 million in 15 months of operation, or about $1,00,000 per day. If they have 20,000 orders per day with a loss of Rs. 200 per order (on discounts and team cost), that's a loss of approx. $60,000 per day. The idea of ​​raising $1,00,000 per day with a loss of $60,000 per day clearly makes no sense. Keep in mind: this is just a sample. Get a personalized article from our expert writers now. Get a Custom Essay Difficulty Raising Funds If 2015 Was the Year Venture Capital Firms.