HungryNaki scales down operations

HungryNaki, Alibaba's food delivery affiliate in Bangladesh, has scaled down operations by half and laid off a majority of its employees. 

The cuts have come about in a little over one year after Alibaba acquired 100 per cent of HungryNaki, which was launched in 2013, from its local owners via Daraz Group, the Pakistan-based e-commerce platform it acquired in 2018.

It has withdrawn from 15 of the 30 zones it had been operating in. Of the remaining zones, 13 are in Dhaka and two in Chattagram, according to sources.

Earlier Uber Technologies closed the operations of its food delivery platform Uber Eats in June 2020, just after one year of entering the market. Last year, Shohoz also closed its online food delivery arm amid shrinking orders.

Currently, foodpanda remains the biggest service provider followed by Pathao food.

Daraz initially planned to extend HungryNaki's network to around 100 cities, with investments in infrastructure, technology and human resources when it acquired the venture at an undisclosed amount.

The Daily Star talked to a few current and former HungryNaki and Daraz officials.

According to them, HungryNaki was struggling to generate expected revenue as it was facing stiff competition from market leader foodpanda. So, Alibaba significantly reduced its investment plans for the food vertical.

The officials said the online food delivery market in Bangladesh was still small and customer acquisition was very costly, prompting the Chinese e-commerce giant to focus on selling products and services rather than food.

"No decision has yet been taken on shutting down HungryNaki," said one official.

In a reply to The Daily Star's queries, HungryNaki said, "We are temporarily closing some operational zones due to a reduction in order ratios and service development."

It said to have had to change its business priorities several times as Bangladesh was a relatively new and rapidly growing industry.

Operators must frequently reorganise operations to keep up with technological advancements and ever-changing customer demand, it said.

"…the company believes that zone closing is the appropriate organisational response to such changes in order to protect profitability," it added.

The company had to let go of some employees as some roles and functions were merged, it said.