PepperTap: Delivery Services that failed to deliver

🔍Insights

Peppertap, a 2014 online grocery delivery platform which seemed promising but eventually lost its steam. We'll take a closer look at this delivery startup.

Ashutosh Roy Choudhury

Jan 1, 2021 — 4 min read

Over the years there have been a number of startups which have looked promising initially but ultimately failed to deliver. PepperTap is a 2014 startup that belongs to this category. The online grocery delivery service came up with a great idea, in fact one which is extremely significant in the contemporary world. However, they couldn't make it work the way would have liked it initially. Let us take a closer look into PepperTap's journey.

PepperTap: A fresh idea in town

Back in 2014, there weren't many online grocery delivery platforms as compared to the present day. The competition was really low, but the contenders made sure the market didn't sway in anyone's favour readily. Though one can say that the lack of competition can aid a business to fortify its position in the market, this unfortunately is not the case always and PepperTap happened to be one such exception.

The inception of PepperTap can be credited to the idea of saving people from standing in long queues in order to buy groceries. The idea was to get products ranging from groceries and essentials to consumables and condiments delivered right at the doorstep of consumers. Back then the idea was pretty fresh and hence drew a handsome amount from a various investors. Financial backing is crucial for any startup and PepperTap did well to earn that. What they didn't do quite well was the execution of their plans with the help of that capital.

The visionaries behind PepperTap — PepperTap founders Navneet Singh and Milind Sharma

PepperTap's Mission Statement and its Outcomes

PepperTap aimed at providing daily consumables and groceries to households at unbelievable prices. Since their idea and concept were fairly new for the Indian scenario, PepperTap tried to ensure that high prices aren't one of the reasons for their unsuccessfulness. This lead to them offering extensive discounts and price drops, something which would lure customers but make it difficult to sustain sellers. This proved to be effective initially but in hindsight was draining out the startup's funds.

The fact that they didn't have a proper inventory of their own unlike their competitor (Big Basket) added to their operational costs. PepperTap's vision cannot be questioned but the way they ended up making hasty decisions is what led them to their downfall.

Where did PepperTap fail?

The failure of PepperTap can be credited to a number of factors but lack of planning and management turned out to be the most detrimental ones. Having started out with ample funds from its investors, While 2015 saw Venture Capitalists support a number of startups, by 2016 the statistics weren't as favorable for startups. PepperTap was almost on the brink of using up most of the capital it started off with since the expenses were higher as compared to the profits.

Their expansion strategy was poorly executed amidst shortage of funds. The situations forced them to outsource most of their functional assets and pay for them eventually. This in turn added to their operational costs and eventually lead to the shut down of PepperTap's services in 2016.

There were quite a few speculations regarding the Indian market being used to the traditional ways of buying groceries. The fact that the local Kirana wala offered free deliveries along with discounts to regular customers made them stick to their local vendors. Another aspect which can be considered is the importance of Grocery shopping as a recreational activity for most households. It is a ritual wherein buying groceries is best done in person and is a great way to get some fresh air as well. All these, in hindsight affected PepperTap along with its mismanagement and poor execution which ended them far from being a success story.