The online grocery market in India was valued at USD 2.9 billion in 2020, and it is predicted to increase at a CAGR of 37.1 percent from 2021 to 2028. The industry has exploded in popularity in recent months as a result of changing consumer lifestyles, increasing urbanization, and a tech-savvy youth that wants to buy things online. People are increasingly turning to customizable and convenient online platforms for grocery shopping instead of walking down to the neighborhood vendors as their disposable incomes rise and their lifestyles become busier. Following the COVID-19 epidemic, the demand for online grocery delivery became increasingly apparent. Consumers are resorting to online food shopping, which is not only convenient but also safer, as a result of the social distance standards.

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The online grocery delivery scenario seems promising after the Covid-19 epidemic, but what was the scenario before? Were there any major players in the industry? Did their business model sustain? If not, why? The answer to all these questions will be discussed in this case study. Keep reading to find out.

Peppertap, a Gurgaon-based delivery app, was launched in 2014 by Milind Sharma and Navneet Singh. Long lines at grocery and vegetable stores were the issue Peppertap was attempting to alleviate. Peppertap was an online grocery delivery app that allowed you to order groceries and have them delivered to your door with a few clicks of a button. Peppertap made it a point to ensure that orders were delivered within two hours of being placed, and this became the company's USP. By October 2015, Peppertap had attracted a large audience and had established itself in 17 cities across the country. It quickly rose to the top of the charts and became one of the country's top three grocery delivery applications. 

When everything was going so smoothly, what exactly went wrong?

Peppertap was overwhelmed with orders, more than they anticipated. They lacked the technological backend to support their app. This resulted in the users facing constant crashes and glitches. 

Peppertap practiced poor inventory management, Because of the high volume of orders, inventory from each store and city had to be updated at least three times a day to avoid confirming orders that were not in stock. Now, this was a completely impractical undertaking, and it caused PepperTap to lose momentum as a result of inventory issues and orders that had to be canceled.

The company struggled as a result of the discounting and offer model, which also proved to be an inefficient cash burn method after a few months. They could reduce their discounts because certain customers may remain loyal due to good service. However, they knew this wouldn't go over well because, after a few test rounds, they discovered that it was the discounts, not the customers' loyalty, that drew them in.

Peppertap was a resource aggregator. As a result, it dealt with two different categories of customers. The true customers, those who ordered the product, were number one, and the vendors from whom they obtained the commodity were number two. They were able to keep actual customers pleased by offering discounts and providing an intuitive interface, but it wasn't so easy for its second class of clients. This company was founded in 2014, and local vendors were not very tech-savvy at the time. To list their products, one (vendor) must utilize their app, fill in the necessary information, and correctly register it. Because this was inconvenient for them, the numbers gradually began to decline!

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Salient Learnings:

• Analyze Your Business Model: Examine the long-term viability of your business concept. Working on short-term goals will never allow a company to adapt to changing times and trends.

• Inventory Management: It is essential for meeting customer expectations on time. Without a managed inventory, it’d be very difficult to provide customer satisfaction.

• Prepare For the Future: Make sure your tech backend can handle an increasing number of customers, Peppertap had a backend that wasn’t developed for the future.