NEWS
DIAGEO EXITS INDIAN ALCOHOL DELIVERY STARTUP HIPBAR AT 98% LOSS
By Siulan Law Mathews DipWSET
27-7-2021
Source: HipBar
UK-based drinks giant Diageo has exited from its investment in India’s alcohol home delivery startup HipBar at a loss of 98%, according to Times of India.
In June 2018, Diageo invested through its Indian arm United Spirits some Rs 270 million (USD3.96 million) to acquire a 26 percent stake in HipBar.
Times of India reported that the company has recently sold its 26 percent stake in HipBar to the startup’s founder Prasanna Natarajan for Rs 5.2 million (USD69,839), representing a loss of 98 percent.
The move comes at a time when more and more states are joining the alcohol home delivery bandwagon.
Stating the reason behind the decision, Diageo spokesperson told Times of India that while home delivery had opened up in several states since 2020 because of the pandemic, it would take some years to mature as a model.
"In addition, the alcobev model is likely to develop quite differently in India to regular e-commerce due to the nature of regulation of this industry," the spokesperson added.
HipBar co-founder Natarajan told Times of India that the firm faced some pushback from some pockets of the trade and the state excise department of Karnataka and this matter is still sub judice.
"HipBar, being an early and solo mover, had to face many regulatory hurdles and challenges to open up home delivery, which it eventually did with states of West Bengal and Odisha. Post COVID-19, the market dynamics have changed and the more established players are also entering this niche space," he added
The HipBar app used to be a digital currency that can be used only at pubs, bars and licensed drinks stores. It became an alcohol delivery platform as well with recent relaxation on laws governing online alcohol sales.
India’s alcohol market is estimated to worth USD27 billion by IWSR Drinks Market Analysis. A number of e-commerce giants have made inroads into India’s alcohol delivery sector since the pandemic.
In June last year, American e-commerce giant Amazon and China’s Alibaba-backed grocery platform BigBasket, have both won approval to deliver alcohol in West Bengal.
They followed the footsteps of local food delivery platforms Swiggy and Zomato which were the first to have won alcohol delivery approvals in India.
(the writer can be contacted at: info@thewinechronicle.com)
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