HungryNaki awaits shutdown

After cutting down operations and laying off employees last year, HungryNaki, the first online food delivery platform in the country, awaits shutdown by the end of this month, according to sources.

The company, which was fully acquired by Alibaba affiliate Daraz Bangladesh in 2021, has been facing hardship in competing with the market leader foodpanda and the second-largest player Pathao Foods. The closure has also been triggered by the tighter business environment nowadays, said insiders.

Khondoker Tasfin Alam, managing director of HungryNaki, did not respond to the request for a comment regarding the shutdown.

However, its parent company Daraz Bangladesh told TBS that the closure of the app and the brand HungryNaki was under the plan.

"We have not made any final decision yet. The plan is to divert the customers to the Daraz app and run the business through a single app," said Ahaduzzaman Chowdhury, head of Corporate Communications of Daraz Bangladesh.

The majority of the employees of HungryNaki would be accommodated in different departments of Daraz, he added.

HungryNaki, founded by three Bangladeshi friends in 2013, is going to be the third major player to quit the nascent food delivery market of Bangladesh, following UberEats which opted out in 2020 and Shohoz Food in 2021. Ponzi-style e-commerce Evaly's food delivery wing E-food was also closed in 2021 with the end of Evaly.

After last year's downsizing, HungryNaki was a team of around 40. 

One of them told TBS the closure was obvious and just a matter of official announcement following the anticipated green signal from the parent company's regional headquarters.

The food delivery industry that boomed during the pandemic saw its best time in 2021 when daily orders crossed 1.2 lakh, even hitting nearly 1.5 lakh in a few days that saw cash-burning mega fests in the industry.

Thanks to the top-line war among the competitors, mostly backed by venture capital, that let customers enjoy food delivered at discounts.

However, following the Ukraine-Russia war that dried up venture capital flow alongside pushing food prices higher and making consumers conservative, the industry started to face a decline.

Daily orders across the country have more than halved in the last 15-20 months, according to the industry people. In Dhaka and Chattogram, daily orders range from 35,000-40,000 while it hovers around 60,000 across the country, they estimated.

Foodpanda, with its widest network across the country, serves around two-thirds of the market while the rest is served by Pathao Foods.

After the acquisition of HungryNaki, Daraz was advancing with a plan to expand to 100 coverage areas and reached 30 areas before downsizing to 15 last year. Nowadays, HungryNaki covers only a few areas in the capital, with fewer restaurants and delivery men.

Analysts believe HungryNaki's downsizing and the plan to foreclosure have been a part of the Daraz headquarters' strategic preference to focus on profitability instead of subsidised expansion during an adverse time.