Jugnoo, the Chandigarh-based on-demand auto rickshaw aggregator, has restarted hyper-local delivery by launching a service called Fatafat.
The hyperlocal delivery model has been erratic till now. Many companies with many online grocery firms have shut their shops in the past few months. The service, which was launched by the Paytm-backed firm, has been restricted to delivering only vegetables and fruits through the company’s network of auto rickshaws.
The service has started in Chandigarh and will be expanded to other cities, beginning with Gurgaon in the next one month.
Samar Singla , the founder of Jugnoo, said. “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 auto rickshaw drivers who are not taking a ride or are sitting idle.”
Fatafat is already clocking 100 deliveries a day and the model seems “unit-economics positive,” he said.
The Fatafat service was first started in March last year and continued for about eight months. The service was then used to deliver orders for products such as grocery to buyers at their homes from stores within the city. About 2 lakh users were registered with Fatafat at the time and the company was receiving more than 1,000 orders a day across four cities.
The service was withdrawn for multiple reasons, said Singla. “While Jugnoo’s network of autorickshaws was not that big earlier, there was a lot of competition from other grocery delivery apps which were giving huge discounts. Also, we realised that not everything in hyperlocal delivery is profitable.”
Singla said that FMCG products have very low margins and are available everywhere. Hence, making a profit out of them is impossible. The company realised that there is a huge market for fresh fruits and vegetables and there is a decent margin on them.
According to Jugnoo, which started operations in 2014, its autorickshaw aggregation business has expanded to 10,000 autorickshaws registered on its network in over 20 cities.
