On-demand local market place, GetNow shuts down in Nagpur!
In what seems to be a shocker, local e- market company in Nagpur, GetNow has closed operations in Nagpur once and for all! The local startup company has also sacked eight employees in the process. This development was confirmed by the co- founder of the company: Mr. Shailesh Deshpande. He said the company was thinking about a pivot and is also open to the possibility of being acquired by another company. It is looking at a Business to Business (B2B) role, Mr. Deshpande added.
There are many startup companies who, like GetNow, have sacked hundreds of employees because the industry of e- shopping or online shopping (especially grocery delivery) is plagued with low capital, high logistics cost and exponential MRP for customers. Companies have to pay a lump sum to drivers or delivery boys to deliver their products to their customers due to high cost of fuel for transportation (petrol and diesel at Rupees 68/- and Rupees 54/- respectively, currently) and this cost of transportation or logistics is added to the MRP of the product making the product exponentially dearer to the customer thus reducing the demand for the product, no matter how good it may be. In February 2016, the e-commerce based company, Flipkart had shut down its grocery delivery application and almost five months later the largest cab provider company in India, Ola too decided to shut down its grocery delivery application, Ola Store. Mr. Deshpande says: “The consumer facing front of this business has poor unit economics. When we started, our average ticket size was Rs. 250/- but the delivery cost was Rs 50-55/- and it was difficult to break even,” said Deshpande. “In November 2015, we moved towards a subscription-based model. The unit economics improved but scalability was a big problem.”
GetNow was founded in November 2014 by Mr. Jayesh Bagde. It had tied up with 400 retailers and offered more than 45,000 products of different categories through its Android application and website. The startup only operated in Nagpur. It had only 18 employees on its payroll when it decided to shut down its grocery delivery business. Those in Nagpur who had enjoyed buying the variety of products GetNow had delivered to their doorstep (including grocery) now have to slog and buy products manually from remote places.
This news should be taken as a wake up call by the government of India. The Indian Prime Minister, Mr. Narendra Modi should realize that it is not enough just to launch a scheme (Stand up India Start up India) to promote entrepreneurship in India. If we want development, sustainable growth and employment opportunities, the government must create a suitable environment for growth and establishment of startup companies (like the e- shopping industry) who can provide employment for thousands of unemployed youth in the country (which Mr. Modi boasts of) otherwise the hope of employment will become like a soap bubble to job seekers (youngsters especially) who can be sacked at any point of time if companies like GetNow have a tough time earning profit.
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