Case Study

“Yummy77 Delivers Groceries within the Hour”

Name
 Shahrukh Aziz (1935146)

Class
Master of Business Administration (EVE)

Semester: 2nd

Assignment # 4

Submitted to:
Waqqas Khanzada

Department of Management Science

Shaheed Zulfikar Ali Bhutto Institute of Science and Technology,
Islamabad.
 Yummy77 Delivers Groceries within the Hour

Yummy77 ran a web store that, from the summer of 2014, allowed consumers to put an order by

phone or computer and receive delivery to their homes or office within an hour. during a way it

was the beginning of online shopping - delivering limited value, ensuring temperature control and

weak handling to guard rotting fruits and vegetables. The reviews were good, and customers kept

returning. On the opposite hand, the Yummy77 model has already proven to be costlier and

complicated than the founders originally expected. Yummy77 has built 53 small shops round the

city, both to display goods and facilitate quick delivery and price of those stores contradict the

thought of lighting up the capital. during a series of technologies, food delivery has been a

tempting opportunity; most, however, eventually find it an insurmountable challenge. Webvan was

the primary to enter the market and set the bar high, promising to bring food home within

30 minutes. HomeGrocer.com was almost identical. a couple of months later, Home Grocer's very

small customer base couldn't support the company's infrastructure, and residential Grocer was sold

to Webvan, which accumulated quite $ 800 million in losses and collapsed the subsequent year. For

one thing, the efforts of the merchants proved to be very successful. In early 1989, the food

delivery service Peapod offered a web ordering program in partnership with Jewel Food Stores in

Chicago. due to this pre-consumer Internet access for consumers, Peapod has provided modems

and special software to assist customers place orders. Yummy77 began by launching an ad ad

campaign showcasing classic food-selected art. One billboard featured Mona Lisa's smile as she

discovered a bowl of fish. the corporate simultaneously introduced the primary set of promotions

that funded the delivery. This increase is attributed to the rise within the number of competitors.

1mxian, Beequick, Benlai, Dmall, etc. were the competing companies. Changes within the broader

market have also affected traditional food stores throughout China. Long-lasting
products are reasonably profitable institutions thanks to the low risk of fabric damage and therefore

the high prices related to product size. But as consumers began to shop for solid items online, the

value of supermarkets from this segment began to say no. International retailers face daunting

challenges. In 2012, French carpenter Carrefour was ordered to temporarily close the China branch

after reports that the shop had sold expired meat and labeled the common chicken “a free haven.”

While Yummy77 offers imported goods, it remains known for its low cost, unlike a number of the

competitors described above. it had been unimaginable to lose money indefinitely, and despite the

cosmopolitan $ 20 million investments from Amazon, the capital Yummy77 was limited. the worth

battle with competitors will only increase losses, and funded rivals are sponsored by Alibaba and

Tencent, so Yummy77 might not win. Instead, Yummy77 moved on to open its retail stores

throughout Shanghai and, the corporate organized, across. Yummy77's smaller stores have brought

food benefits. Since the stores were so on the brink of the purchasers, it had been realistic to deliver

more orders within an hour, a profit that was largely reflected by Yummy77’s marketing materials.

Yummy77 also adds discounts to regular customers. Orders also attended accentuate an outsized

number of a couple of different items, like the entire drink case provided, offering extra

performance in packaging and filling. The restaurant business was very fragmented, with regional

firms and nobody responsible across the country. Indeed, some restaurant supply firms wont to use

multiple layers of vendors and distributors, which might probably increase the value additionally to

the Yummy77 model and short-term sales.

Competitors: The market for electronic ordering of fresh food in China more than doubled
from 2013 to 2014, reaching 2.89 billion yuan (about US$462million) in total. This increase was

embodied in the rise of a number of competitors.

1mxian, Beequick, Benlai, Dmall, Epermarket, Farmlink, Fields and many other

competitors.
Business-to-Business Prospects: Yummy77managers realized that the company’s
logistics infrastructure could serve not just consumers but also businesses, including restaurants. In

June 2015, the company began to pursue commercial sales. At first, Yummy77 treated small

restaurants the same as consumers, letting them order one day for delivery the next. Restaurants

already used this approach for orders from other suppliers, so this fit both restaurant routines and

Yummy77’s operating model. As Yummy77 shifted to within-an-hour deliveries, restaurants got

the benefit of that speed, allowing them to adjust to unexpected demand—a particularly useful

feature for small restaurants with limited space for storing and with significant uncertainty about

customer demand. Yummy77 also added discounts for frequent customers. The largest and most

frequent customers received discounts of approximately 20% compared with the prices charged to

consumers.