Ola might be a big name in the ridesharing business, but when it comes to the food delivery segment, the company has not succeeded to dominate the market for long periods of time. Not that it hasn’t tried, it certainly has, but fortune was seldom in its favor.
Its track record does not speak in its favour either. In 2015, the ridesharing company made its first venture into the food delivery business with Ola Cafe, its 20-minute food delivery service. However, it did not take off and was soon shut down.
Two years down the line, it acquired Foodpanda India, the online food delivery platform of Berlin-based Rocket Internet, in an all-stock deal. But after two years, the company ceased its food delivery business and fired employees as it continued to focus on home brands and the cloud kitchen business.
In the same year, Ola Foods was born out of Ola’s vision to build the country’s largest and “most-loved” network of food brands. It went on to include a multitude of brands such as Khichdi Experiment, Biryani Experiment, Paratha Experiment, Bowlsome, Daily Diner, Nashta Express, Gulpp and That Pizza Place. The company had doubled down on its cloud kitchens back in 2020 during the height of the pandemic, and it operated nearly 50 cloud kitchens in the year.
Now, an Economic Times report tells us that the mobility company is once again scaling down its food delivery business.
That’s right, Ola Foods’ business seems to be scaling down, and it seems that it is aiming to sell most of its kitchen equipment at discounts of up to 30-50%.
This begs the question, why is Ola taking this step and putting a halt to the mega expansion plans of its cloud kitchen business and running over 500 facilities across the country? The answer is a simple and rather common one – lack of demand. Ola Foods could not garner traction for its cloud-kitchen brands, which prevented it from taking off and becoming a success that will last for years. Add to that the increasing focus on Ola Electric, and you get why Ola Foods seems to have reached the end of the line.
Ola now reportedly plans to integrate (and is already in the process of doing so) some of its cloud kitchen brands with Ola Dash, its 10-minute grocery delivery business. In case you missed it, Ola Dash had scaled down its business and temporarily suspended operations of most of its dark stores due to a dearth in demand this April.
