A well-known phrase in the advertising industry states, “When all else fails, use emotion. And when that seems a trifle out-of-sync proposition in the product category, rush to good ol’ mother’s love“.
In India, “maa ka pyaar” (a mother’s love) is a surefire winner. This is exactly what the snack brand “Hippo” did with its munchies variant. Initially, Parle Agro tried to tackle the global hunger issue with their product but then shifted their focus to selling it based on the promise of love and care.
However, none of the strategies could stop Parle Agro from discontinuing Hippo chips. In this article, we’ll examine the issues and failures that contributed to Hippo Chips’ demise and explore the causes of its failure.
Let’s discuss what happened to Hippo chips and why Hippo Chips failed.
Launched in 2009, Hippo Chips were a common snack found in lunchboxes and pantries all over the nation. Hippo Chips soared to fame and were well-known for their distinctive form and delightful crunch. But as time went on, the brand gradually disappeared, leaving people to wonder what went wrong.
Hippo’s packaging was larger than the average snack packet, with a giant hippo logo on the front, bright colours intended to stand out from the crowd, and distinct flavours. The word HIPPO was spelled out in big, bold letters to match the personality of the creature on the front of the packet, a hefty fat hippo.
Hippo Snacks were launched in the following flavors:
Chinese Manchurian
Indian Chatpatta
Hot-n-Sweet Tomato
Italian Pizza
Yoghurt Mint Chutney
Thai Chilli Cream
Afghani Tikka Masala
Greek Yogurt
The brand sought to be a guilt-free snack during hunger moments; hence, the tagline “Hippo Fights Hunger” was chosen. Hippo was promoted with ‘Hunger is the root of all evil. So, don’t go hungry.’
Hippo chips had several unique features that set them apart from other snacks:
They were made from wheat
Instead of being fried, they were baked
Their marketing approach was excellent
They quickly became popular in the market shortly after their introduction.
Following its demand and supply issues, Hippo Snacks India recognized the problem it was encountering and did not want the consumers to take the empty retail shelves as a manifestation of the brand’s failure in a short period.
They did not want to spend huge amounts of money outsourcing the distribution and supply tasks to withstand the demand-supply problem, so they directly communicated with their customers. This led to the beginning of the Plan-T campaign. To solve their difficulty, they urged their Twitter followers to submit a tweet with the hashtag @HelloMeHippoabout.
The goal of this campaign was to include customers in every step of Hippo’s supply chain across multiple locations, and it was successful since it drew a large number of enthusiastic participants.
Using Twitter, Hippo recruited 400 new workers to help with sales and distribution at no expense. Its sales increased by 76% in the preliminary phase of its takeoff. Before the campaign launch, Hippo Snacks India had 800 followers on Twitter, which soon increased by 300% to 4000 followers, which was equal to 50% of its sales and distribution network.
Hippo gathered data from Twitter, analyzed it, and forwarded it to regional distributors in the affected locations, who then refilled the shop shelves, ensuring that customers were satisfied within hours.
Hippo was qualified to evaluate markets and observe potential markets for its business development with the help of this campaign. The good thing about Hippo was that it recognized its shortcomings and modified them into strengths by leveraging social media. Hippo used social media to connect with consumers and procure real-time outcomes to availability problems. The Twitter handle of Hippo was very active indeed! Before getting deactivated, it had more than 4000 tweets posted daily on everyday titbits.
2. Indian Food League
In 2012, Hippo inaugurated an online campaign named IFL (Indian Food League) to attract cricket fans during the IPL (Indian Premier League) session.
Indian Food League was modeled to fascinate all cricket fans and apprehend the emotional rivalry amongst Indian cities during the IPL. The IFL rode on the already existing rivalry among T20 teams by pitting these regions’ popular flavors and dishes against each other and getting people to comment in support of their favorite flavor on the IFL microsite.
The dishes chosen were the specialty of that particular city, like Papdi Chat from Delhi, Kanda Poha from Pune, Dum Biryani from Hyderabad, Paratha from Punjab, Idli Sambhar from Chennai, Pav Bhaji from Mumbai, Dal Bati from Rajasthan, Masala Dosa from Banglore and Rosgolla from Kolkata.
The front of the pack would inform Hippo munchers to join the IFL. The back of the pack bore a QR Code that would direct Hippo munchers directly to the IFL microsite. They had to be as funny as possible to win that contest. Winners were declared daily and awarded with Hippo bean bags. IFL earned a stupendous acknowledgment, with Hippos sales going up during the IPL season.
Now the question arises: if they were so great, then why were they discontinued? What happened to Hippo Chips?
Hippo Snacks: Various Hypothesis for Failure
Market Share of Potato Chips Brands in India
As per the statistics from Statista for FY23, Lay’s holds thirty percent of the market, followed by Bingo and Balaji with ten percent each. Haldiram has seven percent, while Yellow Diamond accounts for four percent. The remaining thirty-nine percent is shared by other brands.
Even though Hippo Chips is no longer sold, it still has a very loyal fanbase. Many fans call it a “Successful Failure.”
Several hypotheses floating around the internet claim that Hippo toasties could not survive the competition, and thus, the product died down. However, it is hard to believe so. Also, Parle kept quiet on the issue and never disclosed why they had to discontinue their product.
On the other hand, many Hippo loyalists believe that it stopped manufacturing because the company couldn’t handle its production due to the massive demand, and the success destroyed Hippo.
1. Advertising and Branding Problems
Hippo Chips or Hippo Wafers didn’t include any MSG (Monosodium Glutamate), had no GMO (Genetically Modified Organism), zero cholesterol, and zero trans-fat; Parle claimed the product was healthier than many others available at the time. The manufacturers claimed that they were baked rather than fried.
On the other hand, Parle never advertised it for its purported health benefits, so people never had a practical reason to switch to Hippo. The snack was not marketed as a healthier option because no one knows whether a specialty positioning such as health food as a snack option would be successful.
Hippo also had its branding problems, like putting a huge fat hippo on the front of the packet while promoting it as a healthier alternative to other snacks.
2. Demand Problem
Within a few months of its takeoff, demand was becoming more and more, and it was becoming problematic to meet the heightening demand.
After its launch, Hippo, a Parle Agro product earned a tremendous response from customers all over India. The retail racks at several stores were becoming empty quicker than anticipated, leading to a demand-supply situation for the company, leaving the racks across 200,000 stores empty.
3. Competition
Hippo brand had to deal with a lot of competition, which was one of their main challenges. Other well-known businesses, including Lays, Monaco, and Bingo, followed suit after its inception. It had to stand out in a crowded snack industry and build strong brand importance in consumers’ thoughts.
It needed to come up with something unique that would set it apart from the competition. But other than its flavors and packaging, it failed to come up with something else that would help it conquer all the other brands.
Product: Parle introduced an excellent product named Hippo Chips. These chips were free from MSG (Monosodium Glutamate) and GMOs (Genetically Modified Organisms). They contained zero cholesterol and zero trans fat. According to Parle, these chips were healthier than many other competitors in the market at that time. The manufacturer claimed that the chips were baked and not fried. Therefore, we can conclude that the product was made with healthy components.
Price: The snacks were priced at Rs. 10 and Rs. 20, making them competitive.
Place: The products were readily available at all grocery stores, and in case of a shortage, volunteers ensured quick restocking.
Promotion: It could be argued that the company failed to position its product effectively. Despite receiving positive feedback for their marketing campaigns, Parle neglected to emphasize all the unique advantages that their product had to offer. Some of these advantages included being free of MSG, GMOs, trans fats, and cholesterol, as well as being baked instead of fried. Promoting the chips as a healthy snack could have been a major selling point for the brand. Meanwhile, Hippo faced branding issues, such as using a large, overweight hippo on its packaging while marketing the product as a healthy snack option.
Staying Relevant: Brands must continuously evolve and adapt to changing trends and consumer preferences. Hippo Chips failed to keep up with these changes, which ultimately led to its downfall.
Innovation: To succeed in the competitive snack industry, brands must continuously innovate and offer new and unique products. Hippo Chips failed to do so, leading to a lack of excitement and interest among consumers.
Market Research: Conducting market research and understanding your target audience is crucial for success. Hippo Chips may have failed to recognize shifting consumer preferences, leading to a decline in popularity.
Competition: In any industry, it’s important to be aware of your competition and the strategies they are using. Hippo Chips may have failed to keep up with the innovations and strategies of its competitors, leading to a loss of market share.
Huge Factory Making of Potato Chips
Conclusion
Everything appeared to be in order, but the product still died. In the late 2000s, the brand managed to overwhelm other brands for a period. Perhaps because the production costs were too high, consumers were too fixated on traditional chips, and because the Parle Hippo Chips were not advertised or branded properly, the excitement fizzled out. It was discontinued, much to their loyalists’ displeasure. Their Twitter account was disabled in 2014. Only old tweets and an online petition demanding the brand’s relaunch exist today.
FAQs
Why Hippo chips discontinued?
Hippo Chips was not marketed correctly and faced a lot of competition, leading to its failure.
Which is Hippo Chips company?
Parle Agro was the manufacturer of Hippo Chips.
What were Hippo Chips flavours?
Hippo Chips flavours include:
Chinese Manchurian
Indian Chatpatta
Hot-n-Sweet Tomato
Italian Pizza
Yoghurt Mint Chutney
Thai Chilli Cream
Afghani Tikka Masala
Greek Yogurt
Which company made Hippo Chips?
Parle Agro manufactured and launched Hippo Chips India in 2009.
What are the key takeaways from the failure of Hippo chips for entrepreneurs and start-up founders?
The key takeaways for entrepreneurs and start-up founders are the importance of thorough market research, securing adequate resources, and staying up-to-date on industry standards and requirements.
Are hippo chips still available?
Hippo Chips were discontinued in 2014 by Parle Agro, the manufacturer.
Are Hippo Chips banned in India?
Hippo Chips are not banned but are discontinued by the manufacturer Parle Agro due to certain reasons.
Where can I buy Hippo Chips?
Hippo Chips cannot be bought as they have been discontinued since 2014.
Sustaining a startup is perhaps the most difficult phase for any entrepreneur. While everyone advocates entrepreneurship as a shortcut to mint money and get rich scheme, the uncertainty and constant pressure to perform is a huge responsibility even for the toughest of individuals. The team at StartupTalky decided to analyze some unsuccessful startups in India.
As of April 2024, India is home to over 1.28 lakh startups, a significant increase from just 450 in 2016, making it the third-largest startup ecosystem in the world.
The startup failure case study discussed below covers unsuccessful entrepreneurs’ stories in India and will give you insights into the failure of some Indian startups that were destined to reach new heights.Learn from the mistakes these Indian ventures made so that you don’t end up repeating the same.
Summery on why Startups fail and how to bounce back from Startup failure
Serving home-cooked food is becoming a trend among today’s startups. Yumist was one such venture. It was launched in 2014 to cover the daily meals segment in India, a largely untapped market. The founders were Alok Jain and Abhimanyu Maheshwari who managed to raise nearly $3 million in funding. It is one of the top 10 failed startups in India.
Reason for failure:A business model with a high burn rate that required extensive capital beyond Yumist’s reach for achieving growth. Enough funding was also not available to run the startup. So the startup had to shut down. The Yumist case study is often mentioned when one talks about famously failed startups in India.
Let’s be honest, a chance to talk with your favorite celebrity is on everyone’s bucket list. Banking on this wish, Dial-A-Celeb was a short-lived yet exciting concept founded in 2016 by Gaurav Chopra and Ranjan Agarwal and they could be considered as unsuccessful entrepreneurs in India. In addition to video chats with actors and celebs, the platform also allowed customers to get autographed items such as toys and diaries. However, the startup closed its doors within a year.
Reason for failure: The major reason for Dial-A-Celeb’s failure was that celebrities were coming up with their apps to interact with fans. This trend resulted in immense competition for Dial-A-Celeb and a direct impact on profitability. Dial-A-Celeb was shut down in 2017. Know your rivals well and also brace yourself for competition that may arise in the future.
Once on the path to becoming the largest homestay network in India, Stayzilla is reminiscent of a riches-to-rags story. With around $33.5 million in funding and establishing itself in the hotel-rental segment, this brainchild of Yogendra Vasupal, Rupal Yogendra, and Sachit Singhi started crumbling after it failed to repay vendors. The troubles were then aggregated and in February 2017, Yogendra Vasupal officially announced the closure of Stayzilla’s operations.
Reason for failure: Stayzilla was way ahead of its time when launched. People were not ready for such Hi-Fi technology. However, the company somehow managed some time on the funding it received. But when people started becoming familiar with online booking, new competitors emerged with better discounts and deals. Stayzilla was unable to provide the same due to the unavailability of funds. Additionally, legal disputes and a lack of focus on growing the business destroyed Stayzilla.
Roder
Industry
Cab Service
Founder(s)
Abhishek Negi, Ashish Rajput, and Siddhant Matre
Founded
2014
Dissolved
2017
Roder – Failed Startups in India
Inter-city travel has become a mainstream requirement— traveling 100 km or more every day is deemed as just another day to some. The reason may be anything: office location, excursion, meeting a friend, etc. These journeys can burn a hole in the pocket.Roder (earlier known as Insta Cabs) was founded by Abhishek Negi, Ashish Rajput, and Siddhant Matre in 2014 to ease inter-city rides. One of Roder’s highlights was offering one-way rides at nearly half the market price. It is one of the famous startups that failed in India.
Reason for failure:The inability to cope with customer acquisition costs and not keeping up with the user retention rates. Moreover, increased competition from experienced ventures like Ola and Uber added to Roder’s woes. Having a bigger competitor that is more aggressively funded makes the entrepreneurs lose their zeal. And this is one of the major causes of entrepreneurial failure.
Turant Delivery
Industry
Logistics
Founder(s)
Ankur Majumder and Satish Gupta
Founded
2015
Dissolved
May 2017
Turant Delivery| Failed Startups in India
TheB2B startup was an intra-city logistics provider that was launched in 2015 to bring a new flavor to the Indian logistics industry. The algorithm followed by Turant Delivery permitted it to offer services at a price as much as 15% less than what fellow competitors charged for the same trip (as per the endeavor’s claim) and is one of the top 10 failed startups in India.
Reason for failure: The company did not have the funds to sustain itself in the long run.A logistics service provider needs intensive cash flow to run. Hence, funding is essential for any logistics startup.
Students are the new target audience when it comes to offering small loans. Acting on this, Finomena came out with an app that provided ‘EMI without cards’. The aim was to allow students to purchase mobile phones and other electronics on a loan. In March 2016, Finomena raised its seeding funding and then made quick strides before going down in 2018.
Reason for failure: Finomena is counted amongst those Indian startups that failed unexpectedly despite having enough funding. It was a fintech startup that focused on providing loans, a segment already dominated by established players before its entry. Fierce competition from rivals like ZestMoney was the major reason behind Finomena’s failure. Also, burning cash where it was not needed was another cause. Before you launch your startup, check if the target segment has reached its saturation levels. Also, use your funding wisely!
MrNeeds
Industry
Grocery Delivery
Founder(s)
Hitashi Garg, Ravi Verma, Ravi Wadhwa, and Yogesh Garg
Founded
2016
Dissolved
2018
MrNeeds | Failed Startups in India
MrNeeds was a grocery delivery startup founded by Hitashi Garg, Yogesh Garg, Ravi Wadhwa, and Ravi Verma. It provided a subscription-based grocery delivery service. People could easily pay for their subscriptions and receive their groceries on the set date. MrNeeds, a Delhi-based startup, did well with more than 10,000 deliveries in Noida alone.
Reason for failure:MrNeeds was a subscription-based Indian startup that failed. Hence, turnover might not have been that great given how frugal Indians usually’ tend to be. So it is possible that the startup had a lack of funding to sustain itself. The entry of funded grocery delivery startups like Grofers and Big Basket can also be another reason for MrNeeds’ failure. It is considered as one of the top 10 failed Indian startups.
CardBack
Industry
Fintech
Founder(s)
Nidhi Gurnani and Nikhil Wason
Founded
2013
Dissolved
2017
CardBack logo | Failed Startups in India
A fintech platform founded by Nidhi Gurnani and Nikhil Wason, CardBack lets credit and debit cardholders with multiple cards know which card provider would offer the best rewards and points on transactions. The venture was funded by famous angel investors such as Alok Mittal and Sunil Kalra and managed to raise $170k in five years. It is one of the unsuccessful startups in India.
Reason for failure: CardBack could not secure funds after 2014, and the number of multiple cardholders in India was less than what the fintech startup had expected. Hence, the main reason for CardBack’s failure was its over-expectation of market growth. The plan to shift the headquarters to Singapore, where the multiple credit card culture abounds, also failed. The failure to move to Singapore was the final nail in the coffin for CardBack.
Overcart
Industry
Re-Commerce
Founder(s)
Saptarshi Nath and Alexander Souter
Founded
2012
Dissolved
2017
Overcart logo | Failed Startups in India
Overcart was the first Indian fintech player to provide a platform for purchasing refurbished, overstock, and pre-owned items. It was founded in 2012. People could buy and sell their electronic devices on the website. Overcart received substantial angel investment; however, the company failed to capitalize on it.
Reason for failure: Overcart did not seem to be very focused on its business. Unsatisfactory services such as late delivery, poor quality of purchased items, and bad customer service led to customer rebuke, thereby causing Overcart to shut down in 2017.
RoomsTonite
Industry
Hospitability
Founder(s)
Suresh John
Founded
2014
Dissolved
2017
RoomsTonite logo | Failed Startups in India
Last-minute hotel bookings usually end up in a mess and utter disappointment. RoomsTonite was launched to deal with this issue. It received around $1.5 million in funding and ceased functioning by September 2017. The startup rose and crumbled within three years! It is one of the unsuccessful startups in India.
Reason for failure: Having strong rivals in the form of MakeMyTrip and OYO was one reason for RoomsTonite’s failure. The credit crunch also added to RoomsTonite’s woes. Facing a sudden reduction in the loan’s availability is called a credit crunch. Roomstonite faced a credit crunch in 2016 which didn’t allow it to flourish. It is one of the famous startups that failed in India.
Founded in 2015, Doodhwala was a subscription-based platform that delivered milk and grocery items directly to the customer’s doorstep. Founded by Ebrahim Akbari and Aakash Agarwal, Doodhwala claimed to complete about 30,000 deliveries in a day. It is also considered one of the top failed startups in India.
Reason for failure: According to experts, lack of funds and tough competition from the big shots like BigBasket, Milkbasket, and SuprDaily caused Doodhwala to shut down.It is a prime example of startups that failed in India that failed due to strong competitors.
Russsh, one of the failure companies in India, was founded in 2012 by Bharat Ahirwar. Russsh offered both first-mile and last-mile on-demand delivery services to individuals and businesses. The company claimed to have a database of over 50,000 loyal clients and completed 500,000 transactions. However, on June 3rd, 2019, the company announced its closure and is considered a failed business in India.
Reason for failure:The major reason for Russsh’s failure was the lack of funds. It was a self-funded startup and in the absence of enough funds, Russsh was unable to resist the intense competition from its rivals. Bharat Ahirwar also admitted that being a single-founder venture and the absence of a strong team were equally responsible for Russsh’s shutdown.
Rakesh Yadav, Rahul Raj, and Aditya Naikfounded Koinex in August 2017, and in no time the company established itself as India’s largest cryptocurrency exchange. With a user base of over 1 million, Koinex claimed to have a trading volume of over $3 billion and the successful execution of 20 million+ orders.
Reason for failure: Koinex suspended its services on 27th June 2019. The cryptocurrency trading business has seen many ups and downs in India and this instability affected Koinex. The founders stated the lack of a clear regulatory framework for cryptocurrencies in India to be a major deterrent that prevented them from running Koinex’s operations smoothly. Koinex is one of the famous startups that failed in India.
DocTalk
Industry
Health-tech
Founder(s)
Goenka, Chamakura and Aluru
Founded
2016
Dissolved
2018
DocTalk | Failed Indian Startups
Founded in 2016, by Krishna Chaitanya Aluru, Akshat Goenka, and Vamsee Chamakura, Doctalk connected doctors with patients. Through the Doctalk app, one could find good doctors in the vicinity and after just one in-person visit, the patient could connect to the doctor through the Doctalk app for further consultation and queries.
The patients had to pay a subscription fee, whereas the doctors were charged an initiation fee. In 2018, Doctalk pivoted to a new business model wherein it built an electronic medical record (EMR) solution to help doctors write digital prescriptions on customized prescription templates. The EMR business was launched under a new brand name ‘Pulse’ and was sold to the doctors as a tool that let them digitalize the entire consultation, and share the same with the patients.
Reason for failure: Doctalk’s pivot from its initial business model into the electronic medical record solution (EMR) business was not successful; it is often cited as the cause of DocTalk’s closure by company insiders. It is considered as one of the biggest startup failures in India.
LoanMeet
Industry
Fintech
Founder(s)
Ritesh Singh and Sunil Kumar
Founded
2016
Dissolved
May 2019
LoanMeet | Failed Startups in India
P2P lending platform LoanMeet was started in 2015 by Ritesh Singh and Sunil Kumar to help small businesses grow through ultra-short-term loans (for 15, 20, or 30 days) for buying inventories. LoanMart’s services included B2B marketplace financing, working capital financing, cash credit line, and channel financing in the range of Rs 5,000 to 5 lakh for a period of 15 days to 9 months. The company claimed to have an average lending ticket size of Rs 50,000 at around an 18% interest rate.
Reason for failure: LoanMeet raised funding from Chinese investors Cao Yibin and Huang Wei in 2017 but failed to secure any funding after that. LoanMart’s shutdown is attributed to the lack of funds and tough competition from players like Capital Float, Loan Frame, and Happy Loan.
Houseparty
Industry
Social Media, Video Chat
Founders
Ben Rubin, Sima Sistani, Itai Danino, Scott Ahn
Founded
2016
Dissolve
2021
Houseparty | Failed Startups in India
Houseparty was a social media and video chat application that was founded in 2016 by Ben Rubin, Sima Sistani, Itai Danino, and Scott Ahn. The app gained popularity for its unique feature that allowed users to connect with friends in group video calls and play games together in real-time.
Reasons for failure: Houseparty’s closure was influenced by multiple factors, including the decline of the pandemic, insufficient funding, and Epic Games’ prioritization of other areas, and is considered one of the biggest startup failures in India.
Dark Sky
Industry
Weather and Forecasting
Founder
Adam Grossman, Jack Turner
Founded
2011
Dissolve
June 2021
Dark Sky | Failed Startups in India
Dark Sky was a weather forecasting app that provided hyperlocal weather information and accurate forecasts to users. It was founded in 2011 by Adam Grossman and Jack Turner. Dark Sky gained popularity for its user-friendly interface and precise weather predictions, which were based on real-time data and advanced algorithms.
Reasons for failure: Sky announced that it had been acquired by Apple and would be discontinued on other platforms, including Android. The acquisition by Apple led to the dissolution of Dark Sky as an independent entity, and its features were integrated into Apple’s own weather services.
ShopX
Industry
E-commerce
Founder
Amit Sharma, Apoorva Jois
Founded
2015
Dissolve
2022
ShopX | Failure Company in India
Amit Sharma and Apoorva Jois founded the startup, which had secured a total funding of $56.4 Mn from multiple rounds since its inception. The startup had received backing from prominent investors, including Infosys co-founder Nandan Nilekani and Fung Investments.
Reasons for failure: The B2B e-commerce startup operated by 10i Commerce Services had to close its operations and file for bankruptcy. In a filing with the Registrar of Companies (RoC), the startup informed its board that it faced challenges in generating sufficient cash flow or raising new capital through the sale of stakes. It is considered one of the top 10 companies that failed in India.
Lido Learning
Industry
Education Technology (EdTech)
Founder
Sahil Seth
Founded
2019
Dissolved
Feb 2022
Lido | Failed Startups in India
Lido Learning was a Mumbai-based Indian educational technology (EdTech) startup that focuses on providing online education. February 2022, Lido Learning made headlines as the first tech startup to lay off more than 150 employees, using the term “pink-slipped,” which raised concerns about the company’s employment practices.
Reasons for failure: Lido Learning faced a concerning situation when payments to their teachers and employees were not being adequately taken care of.
Amazon Food, Distribution
Industry
Food
Founder
Jeff Bezos
Founded
May 2020
Dissolve
Dec. 29, 2022
Amazon Food | Failed Startups in India
In May 2020, Amazon Food entered the competitive Indian food delivery market. However, after trying it out for more than two and half years, Amazon decided to shut down its food delivery platform, which was being piloted in Bengaluru, India, by 29 December 2022.
Reasons for failure: Amazon Food failed in India due to stiff competition from established players like Zomato and Swiggy, localization challenges in catering to diverse culinary preferences, operational complexities in building a reliable network of restaurants and delivery partners, and broader cost-cutting measures undertaken by Amazon in a challenging economic environment.
Koo was an Indian-language microblogging site designed for connecting, commenting, and engaging. The platform was available in multiple Indian languages and included features such as English-to-regional language keyboards, local language news feeds, and hyper-local hashtags. It allowed users to express themselves on various topics through text, audio, and video.
Reasons for failure: Koo shut down after failing to secure deals with several major internet companies, conglomerates, and media houses. Although Koo had successfully expanded to Brazil, gaining over 1 million downloads within 48 hours of its launch, it struggled to gain traction in the Indian market. It is considered as one of the famous failed companies in India.
Lack of understanding of the market and preparedness
Doodhwala
2015
2019
Aakash Agarwal and Ebrahim Akbari
Online Milk Delivery
Unfavorable circumstances and lack of Margin
Local Banya
2012
2016
Amit Naik, Karan Mehrotra & Rashi Choudhary
E-Commerce
Lack of operation capability and margin
Tiny Owl
2014
2016
Saurabh Goyal
Online Food Delivery Apps
Lack of experience of founders in handling business
Bite Club
2014
2016
Prateek Agarwal
Online Food Delivery App
Lack of capability to handle expansion and competition
Dazo
2014
2015
Monica Rastogi & Shashank Sekhar Singhal
Food Delivery
Lack of funds and management due to intense competition
Yumist
2014
2017
Alok Jain and Abhimanyu Maheshwari
Food Delivery
Lack of funds and high cost of operation
GrocShop
2015
2016
Rahul Kumar and Ayush Garg
Grocery Delivery
Lack of
Mr.Needs
2016
2018
Hitashi Garg, Ravi Verma, Ravi Wadhwa, and Yogesh Garg
Online Milk Delivery
Intense competition and low margin
Monkey Box
2015
2018
Sanjay Rao
Food Delivery
Lack of execution, and planning & model
iProf
2009
January 2014
Sanjay Purohit and Saurabh Jain
Ed-Tech
Intense competition and low margin
Purple Squirrel
2013
May 2016
Aditya Gandhi and Sahiba Dhandhania
Ed-Tech
Intense competition and poor product service
GoZoomo
2014
2016
Arnav Kumar and Himangshu Hazarika
Food Delivery
Intense competition and management
Zebpay
2014
September 2018
Sandeep Goenka, Saurabh Agarwal, and Mahin Gupta
Fintech and Finance
Legal Challenges and Issues
Koinex
2017
June 2019
Rahul Raj, Rakesh Yadav, and Aditya Naik
Fintech and Finance
Legal Challenges and Issues
Card Back
2013
2017
Nidhi Gurnani and Nikhil Wason
Fintech
Lack of funds and execution
DocTalk
2016
2018
Goenka, Chamakura and Aluru
Health Tech
Intense competition
BabyBerry
2012
2018
Bala Venkatachalam and Subhashini Subramaniam
Child Care
Flaws in the revenue model
Doormint
2014
2016
Abhinav Agarwal
E-Commerce
Lack of funds and flaws in the model, poor management
Task bob
2014
January 2017
Amit Chahalia
House Hold
Lack of funds and low-profit margin
GetNow
2014
2016
Jayesh Bagde
Local Electronics Shop Provider
Poor choice for business and low margin
Flashdoor
2015
–
–
House Hold Solution
RUSSSH
2012
June 2019
Bharat Ahirwar
Logistics
Lack of funds and intense competition
Jabong
2012
February 2020
Arun Chandra Mohan, Praveen Sinha, Lakshmi Potluri and Manu Kumar Jain
E-Commerce
Poor service and intense competition
Buttercups
2011
2019
Arpita Ganesh
E-Commerce
Poor execution
Wooplr
2013
May 2019
Zacharia, Praveen Rajaretnam, Soumen Sarkar and Ankit Sabharwal
Social Commerce Platform
Merger
Klozee
2015
2016
Aman Haji, Pratik Moona, and Prashant Jain
E-Commerce
Low sales and poor techniques
Just Buy Live
2015
2022
Rituraj Singh
E-Commerce
Lack of understanding of the market and preparedness
Shopo
2017
2017
Rithika Nelson and Theyagarajan S
E-Commerce
Lack of funds
Finomena
2015
August 2017
Abhishek Garg & Riddhi Mittal
Fintech
Lack of funds
Fashionara
2011
2016
Arun Sirdeshmukh and Darpan Munjal
E-commerce
Lack of funds, Intense competition
Shotang
2013
2021
Roy Singh and Vishal BG
E-commerce
Niche-specific failure and no funds
Hike Messenger
2012
January 2021
Kavin Bharti Mittal
Social Platform
Intense competition
COGXIO
2014
July 2016
Layak, Kinshuk Bairagi and Sarit Prajna Sahu
Dating Platform
Lack of revenue
Parcelled
2014
2016
Bhandari, Xitij Kothi, Abhishek Srivastava, Nikhil Bansal, and Rikin Kachhia
Courier Service
Intense competition and poor service
Ezytruck
2015
2018
Srikanth Maheswarappa, Anand Mutalik, and Narasimha Bs
Logistic
Intense competition
Truckmandi
2015
2016
Ankit Singh, Anurag Jain, and Nishant Singh
E-Commerce
Cash burn and lack of funds
Roder
2014
2017
Abhishek Negi, Ashish Rajput, and Siddhant Matre
Transportaion Service
Cash burn due to corruption involved in the field and also poor management
Tazzo Technologies
2015
January 2018
Priyam Saraswat, Priyank Suthar, Shivangi Srivastav, and Vikrant Gossain
Transportaion Service
Poor business model
AUTOnCab
2014
2016
Surendra Goel and Vinti Doshi
Transportaion Service
Poor business model
Hey Bob
2015
2016
Vishal Kumar, Vinay Reddy, Girish Nadig and Suman Kundu
Transportaion Service
Poor business model
Freshconnect
2018
2022
Amit Kashyap and Tarun Gupta
Agri Tech
Lack of awareness and low-profit margin
Dial-a-Celeb
2016
2017
Gaurav Chopra and Ranjan Agarwal
Media and Entertainment
Poor business model
App Surfer
2011
May 2022
Akshay Deo, Amit Yadav, Aniket Awati, and Ratnadeep Deshmane
Mobile Solution Provider
Intense competition
Intelligent Interfaces
2015
2016
Azeem Zainulbhai and Rahul Yadav
Software Solution
Legal Challenges and Issues
InoVvorX
2010
2020
Maxim Dsouza
IT
Poor business model and management
Stayzilla
2006
February 2017
Yogendra Vasupal
Tourism
Lack of funds
Rooms Tonite
2014
2017
Suresh John
Hospitability
Intense competition
Job Bridge
2017
–
–
Job consultancy
Lack of proper management
Turant Delivery
2015
May 2017
Ankur Majumder and Satish Gupta
Logistic Provider
Lack of funds
Overcart
2012
2017
Saptarshi Nath and Alexander Souter
Cryptocurrency Exchange
Lack of clear regulatory framework for cryptocurrencies in India
LoanMeet
2016
May 2019
Ritesh Singh and Sunil Kumar
Finance (Short-term)
Tough competition from other big players
Main Reasons Why Startups Fail in India
The above-mentioned examples shed light on major issues that are responsible for the failure of nearly 90% of the emerging startups in India:
Lack of funds: On close observation, it is evident that insufficient funding or the lack of it caused most of the startups to shut down.
Highly anticipated model, not in sync with the nature and lifestyle of the Indian population: Some of the startups listed above failed because their highly anticipated models were not appropriate for Indians. Startups should either wait for the right time or educate their future consumers about their technology in advance. Also, the company should pivot only after a thorough market study.
Poor customer service and sub-par quality of the products offered: Be it an online startup or a brick-and-mortar store, customer service is of utmost importance. Some startups compromise on customer service and the quality of their products; the compromise always results in the closure of business.
Lack of focus and legal disputes: It is imperative for any startup to focus on building a solid foundation and then growing it further. Entrepreneurs should also focus on the legalities which may cause disruptions in the future. What if you ignore these two factors? You cease to operate like Stayzilla.
Why Do Startups Fail?
How to Bounce back from your Startup’s Failure
Panic doesn’t help in failure; relaxation and progressive thinking will prove to be useful. Successful people have seen failures and have overcome all challenges.
Here are some tips to bounce back from your startup’s failure:
Share Your Feelings
Don’t think that life ends after a failure. Don’t spend time criticizing yourself or anyone else, but feel proud of the takeaways from that failure. Keep in touch with friends, family, and relatives to stay calm and relaxed in times of failure. Find a mentor or a group of experienced people. Learn from them. Seek guidance and mental support from mentors and entrepreneurs who have seen both success and failure.
Find Different Sources Of Income To Recover Your Loss
Failures will lead to financial difficulties. So work on expanding your income stream. Contact mentors and entrepreneurs for suggestions on income generation. Do not get depressed because money is meant to come and go. Calculate how long your savings will last and plan accordingly. It will be great if you already have a secondary source of income. If not, spend some time creating a source of income through freelancing or consulting.
Prepare And Plan With Consciousness
A lot of lessons are learned after hard times. Use these lessons to prepare and prioritize. Make a survival plan. Startup founders are very comfortable with planning and execution. Appoint suitable founders and workers to assist you. Hard work always pays off, so work until you achieve success. If your startup fails, create an Excel sheet, and write down the skills in one column and the potential income from those skills in the second column. By doing this simple exercise, one will get some clarity on how to keep the business running for a few more months.
Wait For The Right Time To Get The Right Opportunities
Don’t take any important decision at the time of failure because the mind is depressed at such a time. Wait and then plan for the future. Take whatever time is required to make up your mind but once the thought process is in place, do not go back to thinking about the failure. Great opportunities do not come frequently. So wait for the right moment. It is better to wait for several months for the right kind of work than to get stuck on the wrong assignment.
Actions Speak Louder Than Words
Be mindful of your actions after a bout of failure. The right attitude is important during stressful moments. Take the right action with the right attitude. Say no to poor opportunities. Work to the best of your abilities. Aim high and let your failures be the stepping stones to success.
Failure is not an end. It’s the first step to success. Whether you are running a startup or are planning to launch one, note down the mistakes discussed in this post. Nothing hurts more than committing a mistake you were already aware of. If this case study on the failure of some promising Indian startups was useful to you, let us know in the comments.
Recent studies as of August 2024, show that up to 90% of startups in India fail within their first few years, highlighting the crucial need for strategic planning, market research, and strong financial management for entrepreneurs.
What happens when startups fail?
The startup may gather outstanding accounts, take up loans to settle outstanding debts, sell resources for paying debts, and cater to the investors who funded the startup. Venture capitalists and other investors usually end up at a loss when a startup fails.
Why do 90% of startups fail or why do most Indian startups fail?
Here are some of the major reasons: 1. Lack of funds. 2. Highly anticipated model against the nature and lifestyle of the target audience. 3. Poor customer service and low-quality products. 4. Lack of focus and legal disputes.
Which are the failed startups in India 2024?
The startups that failed in 2024 are Resso, Rario, OKX, Muvin, GoldPe, and many more.
What is the hardest business to start?
Businesses that require huge funds to start off with are the hardest to start. Businesses pertaining to logistics, restaurants, and travel agencies are deemed some of the most difficult businesses to start.
What is the safest business to start?
Businesses that require low investment are the safest. Things that can be done entirely from the comfort of your home are the easiest. Some examples are logo designing, digital marketing, website building, online tutoring, virtual assistance, and so on.
Am I too old to start a business?
There is no age limit for starting a startup. You can be 50 and have a unique idea that might take off in the market.
The famous ride-hailing platform Ola has decided to shut down its used cars division, Ola Cars and its quick commerce business, Ola Dash.
At a time when the quick commerce segment in India is expected to reach $5.5 billion by 2025, growing 15 times its current size, why did Ola decide to close Ola Dash operations?
Ola Cars which allowed customers to buy and sell second-hand cars is also being closed down within one year of its launch. For what reasons Ola Cars was shut down? Find answers to all of these questions in this article.
Ola said that they decided to shut down both of their businesses since they wanted to focus more on Ola Electric. But, is that it? Or is there something more to it? Let’s uncover the exact reasons that led to the closing down of Ola Cars and Ola Dash.
No Laser-Sharp Focus
Ola originally started with a ride-hailing business model. In that sector, Ola became very successful. Although the company has always tried to enter new sectors. This is not the first time that Ola is closing one of its startups.
In 2015, the company founded a food delivery service Ola Cafes, a similar service to UberEats.
Ola Cafe
The company also launched a grocery delivery service Ola Stores. Both of these businesses were shut down a year later because the company was not able to attract a lot of customers.
In 2019, the company again tried to jump into the food delivery service by acquiring Foodpanda. However, the company was not able to gain the expected revenue and the company was shut down.
Even after shutting down 3 of its subsidiaries Ola’s will to experiment didn’t stop. In 2019, the company launched Ola Foods, a cloud kitchen business where the company planned to build 500 facilities across the country. But, only 50 cloud kitchens were set up in 2020.
Unfortunately, Ola Foods also failed and now the company is selling its cloud kitchen equipment at a 30-50% discount.
This year Ola tried to leverage the rapidly growing quick commerce segment with Ola Dash but, as you know, this business failed as well.
All these things show us that the company lacked the laser-sharp focus that any business needs in order to be successful in the market. There is nothing wrong with entering different markets but, you should first understand the market conditions.
Ola has 4 failed startups because the company never understood the competition and market conditions. When Ola tried to enter 3-4 different markets where the company didn’t have any expertise the company was not able to properly strategize and allocate resources to different sectors.
On top of that, Ola’s primary ride-hailing service was incurring heavy losses as well. A lot of drivers were leaving the company due to huge salary cuts. Customers as well were not using Ola due to a surge in prices.
Due to all of these reasons the company had no option other than closing down Ola Cars and Ola Dash.
Uncertain Nature of Quick Commerce
As we all know all the companies which are in the quick commerce segment are facing heavy losses. Be it Dunzo, Zomato or Swiggy Instamart.
Ola was also one of those companies which were incurring heavy losses in the quick commerce segment. But, why are these companies incurring losses?
There are two reasons for this: No customer loyalty and heavy discounts. Let’s understand both of these aspects in great detail.
To acquire customers in the quick commerce segment, you need to give heavy discounts to customers on groceries and other items in order to encourage them to try the app. When companies are giving discounts they are not making any profits. But, still, the companies are giving heavy discounts because this is the only way to make customers habituated to your app.
But, here the question arises: How long can you give customers discounts? At a certain point in time, any company like Zomato or Ola Dash have to stop giving discounts.
As customers are using their service just for discounts, there is no customer loyalty. Due to this Ola was not able to make a loyal customer base.
Apart from this, the increased competition in the market from newly launched startups like Zepto and Dunzo made things worse for Ola and the company decided to shut down Ola Dash.
Future Plans of Ola
The quick commerce segment is booming in India. There is a tough fight going on with so many startups like Zepto, Dunzo and Swiggy Instamart in order to capture the quick commerce market in India.
In December 2021, Swiggy invested $700 million into Instamart.
On the other hand, Zomato recently acquired Blinkit, a quick-commerce grocery delivery platform for Rs 4,447.
Zepto, a very popular 10-minute delivery platform, raised $200 million, taking the total valuation of the company to $900 million.
If so many companies are draining millions of money in this sector why did Ola decide to shut down Ola Dash?
Ola said that the company wants to focus more on Ola Electric. Instead of dabbling between multiple businesses Ola has reassessed its priorities and decided to use all of its resources in strengthening its electric sector.
Ola Car’s infra, technology and capabilities will be repurposed towards growing Ola Electric’s sales and service network, the company said in a statement.
Ola’s decision to shift its complete focus on the electric business makes sense because, within months of its launch, Ola Electric has already become India’s largest EV company.
Ola Electric
Ola Electric is delivering huge profits for the company, Rs 500 crore revenue in its first two months of FY 22-23. The company is on its way to surpassing a $1 billion run rate by the end of this year.
Due to all of these positive correlations the company has understood that if they want to stay in the race for a long time it must focus on its electric scooters. Ola has also planned to launch its second electric scooter before the end of this year.
Apart from focusing on its electric sector the company also wants to invest in new areas like cell manufacturing and financial services. To enter the world of fintech Ola has acquired Avail Finance, India’s first neobank that aims to provide financial services to the blue-collared workforce.
Conclusion
As Ola is now allocating all their resources towards Ola Electric it would be interesting to see the future of this company. Even though Ola Electric is India’s largest EV company, it did face a lot of problems in the past for its faulty batteries.
The competition in the electric sector has increased tremendously with players like TATA Motors, Mahindra, Okinawa, Tunwal and Kia Motors. Ola needs to continuously innovate and understand the market conditions if they want to be successful in the EV sector.
FAQs
Why did Ola shut down Ola Cars and Ola Dash?
Ola decided to shut down its used car division, Ola Cars and its quick commerce business, Ola Dash because the company wants to use all of its resources in strengthening Ola Electric. Ola Car’s infra, technology and capabilities will be repurposed towards growing Ola Electric’s sales and service network.
What is Ola Cars?
Using Ola Cars customers could buy and sell their used cars. Under this business, the company would purchase used cars from people and from the company’s driver-partners and would sell them to interested buyers.
Online delivery apps are doing really well. In a world where we all are constantly online and searching for a lot of information, it has become a normal activity to order online. Companies like Amazon, Flipkart and others are now going to the marketplace for every millennial. They are easy to use, convenient to scroll and a heaven for the shopaholics. They are so easy and convenient that people today are getting addicted to the technology of online delivery. This newfound business is doing really well as the whole economy is shifting to a digital place. Everything is online, choosing an item, its delivery tracking and the payments for the same.
Not just that, entrepreneurs from all over the world then thought of inventing further in the direction. Some geniuses thought to deliver food. It was not considered a good idea in the beginning, but as people gave feedback and the delivery services improved, the idea started to seem a viable option. Then it struck, and many companies emerged to deliver food to the public.
There was Zomato, Swiggy, Foodpanda and the likes. All of them competed for one single thing, the largest market share in the food delivery sector. As the competition for market share transformed into a war, it became necessary for some companies to vanish. This competition led to the death of many food delivery companies and led many companies to go bankrupt. One of the companies that vanished from the market was Foodpanda. This article talks about the company and what were the reasons for its failure. Let us see the story in words.
People love convenience and why won’t they? Everyone wants convenience at their doorstep and this is why it is a massive opportunity for companies to scale themselves. Food delivery is a massive convenience for people in our society.
Foodpanda is one of the startups that aimed to deliver food to people in a convenient manner. Not just that, Foodpanda also delivered all sorts of grocery items to its users. It is an online food and grocery startup that was owned by Delivery Hero. It has a good stronghold in Asia and the headquarters lies in Singapore. As of now, it is the largest food and grocery delivery platform in Asia. It operates in about 12 markets in the continent of Asia.
The Timeline of FoodPanda
Foodpanda’s business strategy is an interesting read. We can learn a lot of lessons from the business line of Foodpanda. Before we go into the details of how Foodpandafailed, it is important that we know something about the timeline of Foodpanda. Here we will be looking at the humble beginnings of the company and how it went through various acquisitions on the line.
In early 2015 the company bought full stakes in a company called, TastyKhana. Along with that, the food delivery platform Foodpandaalso gained control of Just Ear India, which was a food ordering portal.
These were some moves that the company pulled off to increase revenue and scale of the company. The efforts did not really affect the revenue and the company even had to lay off 300 employees by the end of 2015.
The time was tough for Foodpandaas the company even faced allegations of malpractices. There was news that mentioned Foodpandaas a non-paying restaurant service provider and there were also allegations of fake listings. At that time, the food delivery platform was based out of Gurugram and was spread across 200 cities in the country. That was a tough year, and the next year, that was 2016, Rocket India was looking for a buyer for the company. They set the price really low, at about 10 to 15 million dollars.
A year later, in 2017 the food delivery business was acquired by Ola for a 100 percent equity and that too at a valuation of around 40 to 50 million dollars. Ola further mentioned in public that the company will further invest 200 million dollars to revive the company and make it work sharply.
After this happened and the company started to work slowly but efficiently, they began offering discounts to lure customers to use Foodpanda. Efforts gained some momentum and people started to recognise this as a good platform to order food.
By the end of August 2008, Foodpanda had reached 2 lakh orders per day of operations. It was a huge feat for the company and the stakeholders of the food delivery platform. But soon enough, clouds of uncertainty covered the sky.
Next year, that was 2019, the magnitude of the orders dropped to 5000 per day, in the middle of the year. Reacting to this, Ola made a decision to stop the loss that they were expecting in the near future. Ola, the owner of Foodpanda suspended its operations in the middle of the same year. They also fired some 1500 delivery partners or delivery executives from their job to cut the expected loss in the food delivery venture.
After that time, it is said that Foodpanda existed in a form of a cloud kitchen. A cloud kitchen was a term coined when Foodpanda acquired a company called “HolaChef” in October 2018. A cloud kitchen refers to a kitchen that is cloud in nature, which means that they only make food and they outsource the delivery and other services out of the kitchen. As a cloud kitchen business, they had three private label brands under them. In 2019, Notable names of sub-brands included FLRT and The Great Khichdi experiment.
Why Did Foodpanda Fail in India?
At its inception, the company was doing well, making a name for itself and was also working towards building a good brand value. By now we discussed the starting and the ending of this company which delivered food to its consumers. By now you must be wondering how the company failed. After we have thoroughly discussed the timeline in which the company operated, it is now time to see some reasons why it failed. Here we will be listing some of the most common and seen ways or reasons that failed Foodpanda as a food delivery company. These pointers are not just mistakes of Foodpanda but checkpoints for every entrepreneur trying to set up his venture.
If you only look at the successful ventures, you will most probably be looking at fifty percent of the whole story or probably less. So, let us see why the company failed and then we will further discuss some precautions that could have saved the company.
Now, Foodpanda was a big company, not just looking at the capital invested but the number of employees and the scale of operations was huge. Small leaking can play a big role in sinking the ship of Foodpanda but there were mostly massive issues and blunders.
Before we discuss all the factors that lead to this downfall, let us list some of the factors that lead to this situation. There was no single factor that failed Foodpanda, in fact, there were multiple reasons. Those reasons include fake restaurants and orders, technological issues and disorganised business models, lack of leadership and massive miscommunications.
Miscommunications
There was a massive miscommunication issue that went on in the company. According to a report, the company’s workers were saved from the fact that the owners have left the company. Key people like Rohit Chadda and Mohit Chadda left the food delivery business back in August 2016 and for a long time, employees were not informed about this development. It was later in time when the issue magnified itself and presented itself as a massive hindrance to profitable operations.
The company employees and workers had to face customers and calls from clients about bad operations. When they are unable to deliver food, they have to comprehend their service with free vouchers. Which was a hit to the profitability of the company. From all the instances above, we can notice that the company was suffering massive communication errors and blunders. Due to this, not only The operations were affected but the credibility and profitability were also affected.
Fake Orders and Lack of Proper Procedures
In another set of events, there was news that broke out. In May 2016, a fast-food chain, hailing from Mumbai ended its partnership with Foodpanda. The company complained that the food delivery partner owed the delivery service company payment of one and a half lakh.
It was also mentioned that Foodpanda was delaying the payment without properly explaining the reasons for such delays. After the investigation, it was found that there was no record of such a transaction in the books of Foodpanda. This was a massive blunder that was taken into notice.
To quote another instance of bad governance, we can look at the Tasty Khana case. Tasty Khana was a venture around food delivery, which was based out of Pune and was acquired by Foodpanda in 2014. The founder of TastyKhana, Shachin Bharadwaj mentioned that he was not satisfied with how the work and operations were done at Foodpanda.
He also mentioned some reasons why he disliked the operations at Foodpanda. Reasons include no check for fake orders, lack of proper procedures in place, and financial irregularities.
Documents with crucial data were accessible to everyone and there was mismanagement at almost every second step of operations. These points came right before the downfall started and was a surety factor of the failure of this company.
Failed to Technologically Upgrade
In the decade when every company moved to digital ways of doing business, Foodpanda’s shift was not strong and effective enough. Believe it or not, every company on the globe is shifting to become a technology company first and then the company which it intends to become.
In the case of Foodpanda, they did change for the better but couldn’t follow up with the demands of a digital-centric consumer. The app was not up to the mark, there were restaurants listed that did not even exist and the whole plan of retaining customers was flawed.
Poor Management
Another reason was poor management, which is also a repercussion of poor communication and predictions. Customers and restaurants who were connected with the delivery company would often argue about the bad service that they provide.
Customers had a rash experience talking to their delivery partners and delayed delivery reasons. Every enquiry that the customers made was a hit on the management team of the company. This was another reason for miscommunication which led to a vicious circle of ineffectiveness and blunders.
Foodpanda even failed to capture all the orders that were placed for them, they were also unable to communicate cancelled orders to their restaurant partners which created a ruckus for both the parties. Using the current latest technology available, the company could not figure out an optimum and smooth customer experience, for which they had to pay a price in the future.
Rohit Chadda, the co-founder and the MD of Foodpanda also founded another venture with the name, Ziner. In 2014 the website of Ziner showcased dates that were ditto the same as the Foodpanda servers and website. This action from the team was eyebrow-raising.
Later in a notice, Chaddha mentioned that no data has been taken from Foodpanda, and this is a totally different venture, not relating to the other venture that he had undertaken in the past. The company founded by Chaddha has made over 300 million dollars in sales from clients like Rocket Internet and Goldman Sachs since 2012.
More than a hundred employees from various cities left the business at Foodpanda. The resignations include those from Delhi, Mumbai, Pune and Gurgaon, when asked about the reasons for leaving the food delivery company, they stated poor management and lack of transparency of the company which posed a negative image for the company.
Lessons Entrepreneurs Can Learn From Failure of Foodpanda
There was no simple point according to the facts that prove efficiency and effectiveness in the culture of Foodpanda. Nothing worked properly up to the expected point. These loopholes can be used as a guiding light for people who are willing to amend problems and make solutions.
There was no authority figure when this food delivery company was operating but we can now take some valuable lessons. Here we are going to list some useful advice and tips that we can learn. Let us see what are these checkpoints.
A Proper Framework
As the founder of Tasty Khana mentioned that the company had no sense of operations, it was a lesson right there. A proper structure of things is important, that framework has to be well built and has to be made better through iteration.
This involves getting points on how to run a business and determining the best and most effective/efficient way of running it. The framework that we discussed just now should also essentially meet the business plan of the whole organisation. This is what good corporate governance looks like.
Strong and communicative management is crucial too. Marketing is important but if a company only focuses on pure advertising and does not look toward building a good user experience, it will cease to exist. In this segment of business, both customers and restaurants suffered from the inability of food panda and thus, the venture failed to produce desired results.
Communication for Structuring
At Foodpanda, this was the centre of all issues. Employees and the management did not communicate enough. Moreover, when repercussions happened and the company faced obstacles due to bad communication structure, even then no step was introduced to improve communication.
It was a clear sign that the company is not going to survive much. The customers, the listed restaurants and the people at Foodpanda were involved with a lack of communication which resulted in a bad working environment. No framework or strategy worked in the culture at food panda due to the lack of communication, which was the centre of the storm. This ruffled feathers of restaurants, and most consumers who shifted to other delivery apps.
Ownership Story
The founder of the company Foodpanda left their business and went out. Rahul Chadda and Mohit Chadda were the founders of the company which provided the company with their vision and started a venture. Their vision was worked upon as the company grew its scale but then this happened.
Both the founders left the company and as soon as they left, the vision of the company blurred. This blur in vision caused much trauma for the culture of food pandas. This effect was magnified with less or no communication at all. Adding to this, the founders did not even do anything to better the situation. They simply left with no scope for improvement. When Ola bought the company, they were unstable themselves and they also couldn’t figure out the work that needed to be done with Foodpanda. We all know the end and the story of the downfall of this venture.
The business world operates with a steering wheel of risk. There is volatility in every aspect of every business. There will be market conditions that you will not be able to handle but there are always options to edit the internal environment that suits the outside.
Good internal control and management will go a long way in making a venture successful. The future is uncertain but in the face of that uncertainty, there can be some certainty, which can be bought by sheer work and commitment to building a solid culture at work.
Foodpanda failed in many aspects in building a good inside culture. There were communication issues, there were ownership issues and much more. All these holes in the workings led to the downfall of such a big organisation and these little leaks sank the ship of the food delivery business. This massive failure can be one of the biggest learnings an entrepreneur can take and step forward in the direction of success.
We can learn that it is really important to frame the culture at your workplace. It is extremely crucial to document everything and do everything systematically. Even if these suggestions bring little certainty in the world of uncertainty, this is a really good deal.
Conclusion
Online delivery companies are really doing well. They are probably the backbone of the internet economy. In such a big market, every entrepreneur is trying to put their hands on to get some profits out of the flowing water. This delivery ecosystem has emerged as a new form of a sector that is food delivery. We discussed how there are many key players in the sector who are doing really good. Food panda was one of the popular names among the food delivery apps. The company was doing well until some blunders crept into working for the company.
We discussed that the company was incurring big mistakes in the department of communications and operations. There were issues on the behalf of the ownership of the company, key people, like the chief executive officers, left the company without properly framing the workings of the company. Many of the companies which were acquired by food panda disconnected from the board as the working was not efficient.
From all the blunders that the company did, we can learn a lot. Every entrepreneur who wishes to set up his own venture has to read this story of a food panda. The entrepreneur can then value the power of good communication and teamwork. It is really important to understand the value of culture at work. Culture is what sets the tone of efficiency. If the company and the entrepreneur do not work towards setting up a great culture, no other accomplishments can be achieved.
In the end, the story of the Foodpanda, from its arrival to its peak to its downfall is a really important case study for budding entrepreneurs. Failures happen so that we can learn from them and a smart person is a person who learns from other people’s mistakes.
FAQs
What happened to Foodpanda in India?
Foodpanda entered India in 2015 to capture the food delivery market but failed to do so, later in 2017 the company was acquired by Ola for a 100 percent equity at a valuation of around 40 to 50 million dollars.
Is Foodpanda working in India?
No, Ola suspended the operations of Foodpanda in 2019 as it was facing a huge loss.
Who bought Foodpanda in India?
Ola acquired Foodpanda in 2017 for 100 percent equity at a valuation of around 40 to 50 million dollars.
Today is the time when we have everything on our phones. Any product or service we need, we have an app for it.
The startups begin by providing their products and services online. But there are other people as well who have stayed in the offline markets only.
So now apps even enable to bridge the gap between customers and local entrepreneurs. Nearbuy came up with software solutions to bridge this gap and develop a connection between the two.
Nearbuy provides information about spas, events, restaurants, and more. It helps the customers as well as the businesses to discover and connect with each other.
Nearbuy is a lifestyle application that helps to connect customers with various businesses. It offers discounts, cashback offers, and information about various services. These include restaurants, spas, movie theatres, gyms, salons, and more.
It provides amazing offers that allow the customers to save money every time they visit a restaurant, watch a movie, and others.
Nearbuy helps you to explore your own or a new city. It helps you to discover the hotspots around you.
Foundation of Nearbuy
Nearbuy was founded in the year 2010 as Groupon India. The founders of the company included Ankur Warikoo, Snehesh Mitra, Sumeet Kapur, Sachin Kapur, Ankur Sarawagi, and Ravi Shankar. It has its headquarters in Gurugram, India.
Nearbuy is a management buyout of its parent firm Groupon. In the year 2015, it received investment from Sequoia Capital India. With this, the company rebranded itself as Nearbuy in India.
This step intended to cater to the needs of the Indians in a specific manner. Chief Executive of Groupon India, Ankur Warikoo believed that it would be better to follow a specific path for local Indian markets rather than the global path.
How Does Nearbuy Work?
Nearbuy provides a platform for the customers to get deals and discounts with service providers. To enjoy these deals, a customer has to first register on the company’s website or app.
After registration, a person can look for deals according to their preference. When a person finds a service of their choice, they can buy it at a deal price. Then the customer receives a coupon that they have to present to the service provider.
In this way, a customer enjoys the services at a discounted price.
The businesses get a platform to market themselves and gain customers. Nearbuy receives a commission from the service providers on every service sold via the platform. It offers amazing discounts and deals which attract the customers. This enables the businesses to make more profits and thus, more commissions for Nearbuy.
In this way, Nearbuy acts as a mediator between the customers and businesses.
What Challenges Did Nearbuy Face?
The toughest challenge for Nearbuy was to create a place for its belonging. The company faced troubles in explaining its services to the users.
Nearbuy has been looked upon as a platform that gives discounts. It aimed for more than it. Ankur Warikoo explained its aim as to take offline businesses online. The platform is meant to help the customers discover, buy, and save at the same time.
The company wanted to make the Indian consumers explore the offline markets in a new way. To make people understand this was the biggest challenge for the company.
Few consumers could understand the importance of it. The rest on the other hand didn’t like to understand its importance.
What are the Reasons for Nearbuy’s Failure?
India is a market where customers love to enjoy discounts. Nearbuy was here to help with it. But still, the company could not attract many users. This made Nearbuy unable to stand strong on its own.
Some reasons why Nearbuy failed are:
It was difficult for the company to make people have a proper understanding of its services.
The virtue of a discount-oriented platform was quite limited in India. This made Nearbuy unable to attract and keep customers.
A large part of Indian consumers did not deal in online money transactions. This made the platform useless for a large number of customers.
Nearbuy saw great success in its early days. With this, they expanded their services in more cities. All this required more merchants and money. But the company could not gain enough consumers. This derived the company of its transactions.
Indian customers have a deep love for discounts. They demand some extraordinary deals that they cannot find anywhere else. Nearbuy could not offer that amount of satisfaction.
Platforms like Paytm, Amazon acted as their competitors. These gained more trust among the people. Thus, almost robbed Nearbuy with its users.
In 2017, despite its funds, it could not stand alone and grow. So, it got acquired by Paytm in December 2017. Now, Nearbuy has Paytm as its parent organization.
Few Tips for The Coupon Websites
The coupon websites do not solve any major consumer issues. So, they need to remember certain tips to grow well. These include:
The best tip is to find niche opportunities. The competition in the discount areas is too high. It is good to select a niche and provide the best deals possible in it.
Make use of affiliate sales. It is important to know the interests of the people and offer deals accordingly. This helps to acquire a bigger audience.
When your site offers a discount, make sure it’s bigger than others. If not, then customers don’t need your website.
Indulge in email listings. This will help you to turn your site visitors into email subscribers.
Conclusion
Over the years, Nearbuy has seen a great number of ups and downs. It helps people in saving money with its various deals and discount offers. It acted as a bridge between the customers and offline businesses.
In this way, the company helped offline merchants to earn more sales. Also, it helped the customers to explore the best things to do, buy and enjoy them. With its success and failures combined, it continues to function under its parent organization, Paytm.
FAQ
What is Nearbuy?
Nearbuy is a lifestyle application that helps to connect customers with various businesses. It offers discounts, cashback offers, and information about various services.
How much did Paytm buy Nearbuy for?
Paytm acquired Little Internet and Nearbuy for Rs 272.31 crore.
Why did Nearbuy fail?
Nearbuy failed in India as it did not solve any major problem of the consumers and people weren’t looking or craving for deals platforms in India.
TBH, Nothing brings people together life a Good food, and when it comes to Indian food culture then it’s a feast for sure. As it is cited India is a diverse country with profuse mélange languages, cultures, customs and cuisines, say, South Indians focus on Sambar & Idly, whereas North Indian prepares Roti & Sabzi. Besides, We adopt western culture into our lives in many ways such as their lifestyle, political systems, technologies and cuisine.
For instance, People love to eat French fries, burgers, waffles, pizza and doughnuts as a result many MNC fast-food restaurants have incorporated in India such as KFC, McDonald’s, Dominos, BurgerKing and Dunkin’ Donuts. But, some businesses aren’t going well in India due to its waning survival factors in the market. Pertinent, Dunkin’ Donuts is one such MNC, that didn’t go well in operating profit in India.
Dunkin Donuts is known for its recipe in preppering coffee and doughnuts as well as a quick-service restaurant worldwide. The company initiated their services back in 1950 in Quincy, Massachusetts and was founded by William Rosenberg covering over 12000 stores all over the world.
Why didn’t Dunkin ‘Donuts do well in India?
Usually, Indians follow a soft food diet for breakfast, whereby kichadi or idly is considered to be palatable food to have first thing in the morning. Meanwhile, nobody is willing to consume sugar-contained fast food for breakfast, repercussions may leave you an upset stomach.
That’s where, Dunkin Donuts incorporation made its existence in India in 2012, intending to thrive the sale of doughnuts and coffee all over the nation. But ultimately failed to perceive the Indian food culture which they have followed for centuries.
Dunkin Donuts’ menu is somehow sound tedious for Indians, as the restaurant serves doughnuts as their main dish. Where we prefer eclectic food to one ilk of food with different flavours.
For instance, KFC contains a variety of fast-foods such as burgers, salads, wraps, Chicken wings, Beverages, sandwiches and more. Whereas Dunkin Donuts menu follows a confined food list for the customers that ends with no choice and go for doughnuts.
Dunkin Donuts
In order to thrive in the Indian food market, KFC played well in bringing up Indians’ favourite item- Chicken buckets that hyped the margin of the company till now.
As said, Indians usually go for savoury food, as India is largely known for spices, masalas and curries. They prefer eating Dosa, paratha or idli in breakfast and not something sweet like doughnuts. Moreover, India follows different cuisines in different regions, where Dunkin Donuts overlooked the expectation of people in fast food. Whereas, we prefer chai (Tea) to some iced beverages or espressos.
Indian Food – Dosa, Idli, Medu vada
Price
Price is the main factor, which determined the burgeoning branches of Dunkin Donuts in India, where the brand sells two doughnuts whose average cost is around 600 rupees, which is quite overpriced when compared to the budgeted price of an average salary individual.
Paradoxically, Starbucks- The world’s largest coffee house, succeeded in its market in India even though the restaurants have premium-priced products, where the company agreed to a joint venture with Tata and operated over 2000 stores in India.
Spicy and flavourful foods are what Indians love to have. Doughnuts are not the food the Indians would like to consume often. Dunkin’ Donuts is one of the biggest coffee and food chains in the world. And it is booming in other countries, but Dunkin’ Donuts didn’t understand the taste of Indians. People here prefer spice over sweet.
People love trying new food, so there are still chances for doughnuts in the market. But will Dunkin’ Donuts get prosperous in India like the other countries is a question that only time can answer?
FAQ
Who owns Dunkin Donuts in India?
Jubilant FoodWorks owns Dunkin Donuts in India.
What is Dunkin Donuts?
Dunkin Donuts is an American coffee and doughnut company.
Who is the founder of Dunkin Donuts?
William Rosenberg is the founder of Dunkin Donuts.
Nothing fails like a failure, isn’t it? And when a made-in-India technology succumbs to global competition, it hurts even more. But let’s not get emotional or philosophical about it because that’ll blur our perspective through which this case must be studied & analyzed.
In short, This Happened to Hike Messenger –
Hike shut down its messaging service, by shifting its focus to two new social products—Rush and Vibe. It was rebranded as Hike Sticker Chat with a sticker-centric experience in April 2019. (Know the detailed perspective in the article ahead!)
Is Hike Messenger an overnight success story that had to fail due to its own business, technical inadequacies? No.
Was Hike’s success a fluke, a marketing gimmick, a modern day fad that lost its appeal over time? No, it wasn’t.
Then did it give in to the pressures of business from its rival tech giants WhatsApp & WeChat? Most likely yes!
Having said that, we must know that it isn’t easy to list down top 5-10 reasons for the supposed failure of a well established, popular, financially sound co… especially in a demography like that of India. It is so big & so diverse that there could be multitude of explanations as to why a good business idea/model failed.
Let’s try & capture a Few reasons of Hike’s failure keeping this inherent truth in mind.
Lets find out! What actually happened to Hike Messenger?
Hike within a few months of its launch in Dec 2012 by Bharti Enterprises, caught user’s fancy (users which comprise mostly youth below age 30) almost immediately. Millions of users got on it, 70 M by the end of Oct 2015. WhatsApp was picking up slowly but surely in India at the time. India being a huge market, there was undoubtedly enough space & scope for another co. to succeed. Hike did just that. It kept adding millions of users month over month with addition of cool smart features like free unlimited SMS called Hike Offline, in-app news, cricket scores, personalized stickers store unlike any other app; and added many superior tech features over time such as Hike ID, Hike Wallet, Hike Direct, Hike Web (some of these outperformed WhatsApp) to enhance user experience while keeping user privacy & security intact.
So what went wrong? Why couldn’t it sustain its user base unlike its rival WhatApp? What was unique about WA? Was it just the fact that it captured the booming market of mobile phone users before tech cos. could even realize and anticipate the potential of more than 1 billion market? Probably yes. Let’s analyze further.
Hike was being hailed as the youngest startup in India to get a unicorn title, with a valuation of over 1 Billion within just 4 yrs of launch i.e. around Aug 2016. Hike was most certainly the best & biggest competitor of other widely popular Instant Messaging apps. Then came Jan 2016, when Hike revealed to press that Facebookblocked an option in its ads which allowed users to visit Hike website. FB gave no confirmation but it admitted that certain products & services can’t be advertised on its platform. Smart business decision you’d say but cutting out competition from a Co. born on the land you’re doing business in, puts the blame on the state’s unfavorable policies, inadequate regulations & not-so-friendly business environment yet, more than it does on the company. But all is not so grim, Indian startup community has begun to get its fair share of financial, policy boost.
On January 6, 2021, Hike informed its users that it will be shutting down its messenger and were given a deadline till January 14 to migrate their data.
11/ Finally → StickerChat by hike.
Millions of users spending 35 mins / day.
A very loyal user base that has been a fantastic launchpad for us to bring our innovations to the market → HikeMoji & HikeLand.
Kavin Bharti Mittal, Founder of Hike Messenger did not clearly mention the reason behind this move but tweeted on Jan 10, 2021 about it vaguely as follows-
India won’t have its own messenger.
Global network effects are too strong (unless India bans Western companies)@telegram UX, Groups better than @signalapp
Both are very good. As entities they have the right incentives (more aligned with consumers) unlike FB products.
It is a fact though, given the dominance of American tech giants globally. There isn’t another China in the world, to refuse to bow down to USA’s shrewd business practices, as yet. Even Hike’s marketing team has to share the blame for its failure. Because while WhatsApp was growing leaps & bounds, why didn’t Hike get its fare share? Why wasn’t it as conspicuous & as much talked about as its rivals WA, Telegram or Signal etc? Why wasn’t there enough buzz around it?!
All in all, the fall of Hike is as remarkable as its rise. Needs detailed study, if the start-up scene in India has to improve.
Hike, the super app may have closed its flagship IM brand but it hasn’t gone out of business or ideas. It has split up into Vibe by Hike & Rush by Hike – its two next generation apps for its loyal user base. Vibe is a community based social media platform enabling friendship & dating over secure & verified platform. Rush is an online gaming app. Well, these apps will sure have takers but given the current market scenario which is flooded with such apps…Hike sure has to innovate to set its foot in the market even if doesn’t aim to beat Tinder or Nintendo.
Conclusion
Therefore, however deeply & multifariously you look into the reasons for a big Co’s success or failure, you are bound to miss an important development or phase that must have contributed to it.
Nevertheless, if you’ve an idea you trust, and willing to take risks, there are sea of changes taking place in every business / industry, especially in technology. India is on the road to development, and in the fast lane. Hence every innovation counts in bringing along the revolution that’s happening in digital space & beyond.
Last word – Failure sure hits hard like a rock, but if you use these very rocks & turn them into what they call ‘stepping stones’, you might meet success at the very next juncture. And a budding entrepreneur must always remember that there’s never a last opportunity, just a lost one!
Hike Messenger – FAQs
Hike App is from Which Country?
Hike is a messaging app originated in India. It is headquartered in Delhi.
Who is Hike Messenger Owner?
Kavin Bharti Mittal is the founder and CEO of Indian instant messaging app Hike, and also the son of business tycoon Bharti Mittal
What happened to Hike Messenger?
Hike Messenger is Officially Shut down and has been removed from Google Play Store and Apple App Store
When was Hike Messenger Launched?
Hike Messenger was launched in 2012.
What is Hike Messenger App?
Hike was essentially a cool messaging platform for chatting with funky and killer stickers that came in to innovate the messaging world
Lakshya Singh
Shikha Tyagi
