Bad business: how India’s startups are chasing growth but messing up customer service

Photo credit: Wikipedia

When Mumbai resident Anindita Roy decided to try a new grocery delivery app, she wanted quick service. But when her order – promised within 90 minutes – never showed, she balked.

“It was a prepaid order. I’d waited for long and there was no intimation from the company till I called up. They then said they could not deliver that day,” she said.

Anindita is not an outlier. Across cities in India, customers are reporting growing exasperation due to the blow-hot-blow-cold customer service Indian startups are dishing out.

Tech in Asia spoke to 25 online shoppers in Mumbai, Delhi, Hyderabad, and Bangalore who had complaints about patchy service from a host of companies across the board, including Grofers, Pepperfry, Housejoy, UrbanClap, PepperTap, and others.

Shoppers in Bangalore complained about massive delays in furniture shipments from Pepperfry, made worse by a tough time scheduling handymen to put the furniture together after delivery.

The Pepperfry media team did not respond to emails seeking comment.

Between January and September, investors put in US$7.3 billion across Indian startups. A bunch of these startups are in the customer services sector, meaning that they run businesses that promise people respite from their daily chores.

The trouble is, not only do they compete with other startups, but also with the local unorganized sector, where homekeepers have asked their local grocers to deliver stuff at no extra charge, local beauticians have taken care of patrons’ needs, and the neighborhood laundry guy has picked up customers’ dirty clothes for years.

Photo credit: Wikipedia

“This is a Catch-22 for everyone. Out of ten companies that do the same thing, only two to three will survive. So they are under intense pressure to grow,” said a leading investor, who did not wish to be named because his company funds some of the companies mentioned, or their rivals.

“They are running at a 100 miles an hour and at a 100 miles an hour you can only do so much… any value proposition that says faster, cheaper, better would be under stress. At best you can focus on only two.”

Blow-hot-blow-cold

Sure enough, customers complained about unpredictability, saying experiences on apps that started off promising hassle-free services could turn utterly sour over lost orders, refunds, or untraceability of shipments. Leading app-based companies in India cater to thousands of people in many cities. Grofers, for example, said it takes in over 50,000 orders a day.

Dude, where’s my cab?

Patience pays