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10 Reasons Why Online Grocery Startups are Facing Failures

Blog: NASSCOM Official Blog

Online grocery shopping is a social activity nowadays; It has become the next big thing in the business world. Almost all the leading companies are started moving towards e-commerce industry, as the e-commerce industry has increased with rapid speed and boasted the potential of emerging entrepreneurs. These online grocery shopping apps are promising their users to do online shopping from the comfort of their home. 

But slowly after facing immense competition, unfortunately, the results are not the same as what everyone is expecting. There is a sudden change in the business and leads to force small startups to quit their business. 

Image Credit: thenewsminute

Top Reasons Online Grocery Startups are facing Failures

Online Grocery Business is facing a wide range of challenges; let’s have a look at the top reasons for online grocery startups. 

  1. Market Behaviour

Even after the enormous promotions, some significant factors can affect the business; these include orthodox mentality. People sometimes get attracted to these promotional offers but end up at the regular market due to their traditional values and trust issues. They always prefer to go local grocer instead opting for online grocery apps.

  1. High Promotional Costs

Promoting a business is a tedious and complicated procedure; it is an expensive business, as it requires promotion of the product. It requires a massive investment which leads to an increase in the cost of marketing. Grocery app development costs also play a significant role as it affects the business return and market ratios, nailing the coffin for small startups.

  1. Moving Towards

Shifting a business online requires high costs and a lot of capital requirements. To fulfil the customer need, business needs to come up with great ideas which result in maximising the costs. Companies are sometimes not able to provide the product at affordable prices.

  1. Choosing the Best App

Most of the time, businesses are not able to come up with a standard format; customers are facing issues due to complicated programming. It reduces the interest level, and customers prefer to move to other applications. It is always advisable for a grocery app development company to build those apps, which is more user-friendly with advance techno features. 

  1. Inventory Management

These perishable businesses are investing more in the delivery network. The industry is facing issues due to the perishable items that need to be sold regularly. Proper inventory management can help businesses to work accordingly and analyse the productivity of the business. It is always important to track manual records with the help of automatic tools, but most companies are facing challenges to implement these ideas.

  1. False Shipment

The majority of the customers are facing issues regarding wrong delivery of groceries. Even sometimes, items are damaged or missing that affect the goodwill of the firm. Customers are profoundly affected if they are not getting their desired item. For that business, you need to re-deliver the item to its user. 

  1. Inefficient Drivers & Delayed Delivery

If frankly says, time is money. To be honest, managing the business in a competitive world is a kind of task. It is quite challenging to track the location of the delivery boy, which in turn result to delay in deliveries or sometimes wrong deliveries. Major leading companies like the grocer, BigBasket are using these kinds of Workflow management systems, but for startups, it is difficult to use these kinds of technologies. 

  1. Old Style Shopping Pattern

The homemaker places the average order for food in India. Many homemakers are not app-savvy in the small town of India. Among them, they are in no mood to break away from the everyday shopping routine as it involves human interaction. Customers usually trust to buy items while checking physically. One more point can be considered as online shopping does not allow customers to bargain, but Indian customers love to bargain.

  1. SuperMarkets

Today’s Generation loves to visit supermarkets, as it provides 100 of the useful things at one ruff. Supermarkets are filled with a wide variety of grocery items, be it flowers, grocery, food items. Due to this, online markets are facing significant issues in terms of revenue generation, which results in most businesses being lost in the deep sea. 

  1. Training

Staff training has also been a significant challenge for startups — user- friendly facilities, distribution handling, and other indeed, an enormous task. Most digital companies have not been able to provide their staff members with effective learning, and this has resulted in their downfall.


The online grocery market is going through a rough patch nowadays, due to immense competition and as the rate has just started to pick up. If using advanced technology, this business will undoubtedly be able to work more effectively and profitably. To remain competitive in this field, the company needs to invest more in the implementation of technologies that can help the stock and customer to manage it more easily.

The post 10 Reasons Why Online Grocery Startups are Facing Failures appeared first on NASSCOM Community |The Official Community of Indian IT Industry.

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