Autorickshaw hailing platform restarts hyper-local deliveries

Autorickshaw hailing platform Jugnoo, which secured $10 million funding in Series B round from Paytm, Snow Leopard and Rocketship.vc, has restarted hyper-local delivery and has termed its service as Fatafat.

The service is currently restricted to delivering only vegetables and fruits through the company's network of autorickshaws. Says Jugnoo's founder Samar Singla: "The idea is to have a complete end-to end integration. We will buy from the mandis in the morning and store in our warehouses. The products will then be delivered by autorickshaw drivers who are not taking a ride or are sitting idle.”

Currently, Jugnoo claims to have a network of 10,000 auto-rickshaw drivers across 20 cities in India that is growing at a steady rate across the country. Fatafat is already clocking 100 deliveries a day and the model seems "unit-economics positive," he said.

The service started in Chandigarh and will be expanded to other cities, beginning with Gurgaon one month, Jugnoo first started the Fatafat service in March last year and continued it for about eight months. The service was then used to deliver orders for products such as grocery to buyers at their homes from stores within the city. About 2 lakh users were registered with Fatafat at the time and the company was receiving more than 1,000 orders a day across four cities.

Singla said that the service was withdrawn for multiple reasons. While Jugnoo's network of autorickshaws was not that large earlier, there was a lot of competition from other grocery delivery apps which were giving huge discounts.

"Also, we realised that not everything in hyper-local delivery is profitable.

Products under the FMCG have very low margins and are available everywhere; making profit out of them is impossible," he said.

Jugnoo’s model is very different from those of most other hyperlocal companies, which use the bike-borne delivery model. However, competitor Ola, which has also started auto-rickshaw aggregation, has now begun offering grocery delivery service.

And while Ola Store is limited to Bengaluru for the moment, competition could heat up even as Jugnoo is focussed on expansion.

Source : BS Motoring