Jugnoo Autos Will Now Deliver Groceries

Just when you thought it was accepted that grocery delivery wasn’t really working as a business model in India, another company has decided to throw its hat in the ring – but with a twist. Auto aggregator Jugnoo is going to use its fleet of auto-rickshaws to deliver groceries.


Called Fatafat, the service will deliver fruits and vegetables through autos that are idle on its platform. “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,” said Jugnoo founder Samar Singla. The service is already doing 100 deliveries per day in Chandigarh and is “unit economics positive”, according to Singla.

This isn’t the company’s first foray into the grocery delivery space. Jugnoo had launced Fatafat last year, but had withdrawn it in face of heavy discounts by competition. “Also, we realised that not everything in hyperlocal delivery is profitable.”, says Sangla. But the ecosystem has changed since then – the days of frenzied discounts are over, PepperTap has shut down, and Grofers has exited from several Tier 2 towns. Jugnoo probably thinks it’s a good time to take another stab at the market.

On the face of it, the idea does seem to have its merits. Jugnoo’s autos get rides only for around half the time they’re on the app, and Fatafat will help the company tap into this unused capacity. The new business will also help provide it some diversification against the advances of Ola, which is rapidly ramping up its own auto aggregation platform. Interestingly, Ola’s grocery delivery service, Ola Store, had shut down earlier this year.

But several questions remain. Jugnoo says that unlike Grofers and PepperTap, it plans to hold inventory in warehouses. That’ll add another layer of complexity to its operations, and take the auto hailing company into uncharted territory. In addition to this, it might be hard for the company to meet delivery time commitments, as it doesn’t have a workforce dedicated to this business.

It’s a brave move by Jugnoo, but if it does manage to pull this off, it’ll be a huge shot in the arm for the struggling grocery delivery business in India.

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