Executive Summary

Cheetay, a pioneering Pakistani startup co-founded by Ahmad and Majid Khan in

2015, began its journey as an online food delivery platform competing directly with
global giants like FoodPanda. Over the years, the company expanded its portfolio,
entering the grocery and pharmaceutical delivery sectors, particularly during the
COVID-19 pandemic, when online services saw a surge in demand. To address
changing consumer expectations, Cheetay adopted a dropshipping model initially but
later pivoted to quick commerce by investing in "dark stores"—dedicated micro-
warehouses designed for rapid delivery.

In 2021, Cheetay raised $20 million in Series-B funding through its parent company,
Jabberwock Ventures. This funding signaled significant investor confidence in the
company’s potential for scalability and market leadership. However, despite its
aggressive growth strategy, Cheetay encountered major roadblocks, including
operational inefficiencies, unsustainable cash burn, intense competition from
established players, and economic turbulence in Pakistan. These factors led to
Cheetay’s closure in early 2024, marking the end of an ambitious, yet ultimately
unsustainable venture.

This case study analyzes Cheetay’s journey, focusing on its business model, funding
milestones, challenges, and eventual failure. It also draws broader lessons for startups
navigating the dynamic yet volatile markets of emerging economies, emphasizing the
importance of aligning growth strategies with market realities, financial discipline,
and operational excellence.

Background

Background of Cheetay: From Inception to Peak

Introduction: Cheetay was a Pakistani e-commerce and logistics startup founded in

2015 by Ahmad and Majid Khan. It began as a food delivery service and expanded to
offer grocery, pharmaceutical, and essential item deliveries. At its peak, Cheetay was
recognized as one of the fastest-growing startups in Pakistan's competitive e-
commerce landscape. Despite its rapid expansion and substantial funding, the
company ultimately faced significant challenges, leading to its closure in 2024. This
background section delves into the origins of Cheetay, its business journey, funding,
and the factors that led to its rise and peak.

1. Origin and Founding:

Cheetay was founded in 2015 with a clear vision of revolutionizing the food delivery
space in Pakistan. The two founders, Ahmad and Majid Khan, saw an opportunity to
tap into the burgeoning e-commerce market, which was in its infancy in Pakistan. At
the time, Foodpanda was the dominant player in the food delivery market, and the
founders aimed to create a competitive alternative with a hyper-localized approach.
Their goal was to offer faster, more efficient deliveries through a technology-driven
logistics platform.
Cheetay’s initial business model was simple: it was an online food delivery platform
where consumers could order meals from local restaurants, and Cheetay would handle
the logistics. By offering faster and more reliable delivery services, Cheetay
differentiated itself from other players like Foodpanda, which often struggled with
logistics and customer satisfaction.

2. Expansion into New Verticals:

In response to growing demand and an increasing customer base, Cheetay expanded

its operations beyond food delivery. The company ventured into the grocery delivery
sector, particularly during the COVID-19 pandemic, which saw a spike in demand
for essential goods and home deliveries. With the rise of online shopping for groceries
and daily essentials, Cheetay moved quickly to capture this market by adding grocery,
pharmacy, and essentials delivery services to its platform.

Quick-Commerce Transition: In 2020, Cheetay moved towards a quick-commerce

model, introducing dark stores to fulfill rapid deliveries within 30 to 45 minutes.
This change allowed the company to provide a faster and more convenient delivery
service, particularly for groceries and daily essentials. This strategic shift reflected the
growing trend of on-demand delivery services in global markets, but it also came with
challenges related to inventory management, logistics, and high operational costs.

Diversification: Beyond food and groceries, Cheetay also expanded into

pharmaceuticals, making it one of the first companies in Pakistan to offer on-
demand medicine delivery. This diversification into essential services helped Cheetay
gain traction and become a more prominent player in Pakistan’s e-commerce
ecosystem.

3. Funding and Growth:

Cheetay’s rapid growth and aggressive expansion strategies attracted significant

investor interest. Over the years, Cheetay raised several rounds of funding to support
its ambitions. Some of the key funding milestones include:

Seed Funding and Early Stages: In its early stages, Cheetay attracted seed funding
from investors who saw the potential in the emerging e-commerce space in Pakistan.
These early funds were used to establish the platform, set up operations, and recruit
key talent for the company's logistics and tech departments.

Series A and Series B Funding: In 2021, Cheetay raised $20 million in its Series B
funding round. This round was led by Jabberwock Ventures, the parent company,
which had invested in several other ventures as well. This funding provided Cheetay
with the resources to expand its operations, enhance its technology, and scale its
delivery services. However, the company’s growth came with high operational costs
and an increasing cash burn rate.

Annual Revenue and Financial Growth: During its peak, Cheetay’s annual revenue
reportedly reached around $15-20 million by 2021. Despite this growth, the company
was still operating at a loss due to high delivery and logistical costs, which ultimately
affected its sustainability. The cash burn rate, estimated at around 20-25% of revenue
in 2021, was unsustainable and set the company on a path toward financial instability.

Investments and Expansion: The Series B funding allowed Cheetay to establish a

larger network of dark stores and expand into new cities such as Karachi and
Islamabad, in addition to Lahore. These expansions aimed to capture a larger share
of the growing e-commerce market in Pakistan. However, despite these expansions,
profitability remained elusive.

4. Peak Time and Market Position:

Cheetay reached its peak in 2020-2021, when the demand for e-commerce and on-
demand delivery services surged due to the pandemic. During this period, the
company was operating in multiple verticals, including food, groceries, and
pharmacy, and had gained a sizable customer base in key cities like Lahore, Karachi,
and Islamabad.

Market Share: At its peak, Cheetay had an estimated market share of 15-20% in
Pakistan’s food delivery sector, with competition coming primarily from Foodpanda,
which dominated with over 60% market share. While Cheetay’s market share in food
delivery was modest, its expansion into grocery and pharmacy delivery provided it
with an opportunity to become a more diversified e-commerce platform.

Growth in Active Users: Cheetay’s app gained significant traction, particularly in

Lahore, which was one of its core markets. By 2021, Cheetay had reportedly
accumulated over 500,000 active users and processed thousands of orders daily. The
platform’s success was bolstered by strategic marketing campaigns, user-friendly
interfaces, and competitive pricing.

Technology and Logistics Infrastructure: Cheetay’s technology infrastructure,

which was designed to facilitate efficient deliveries, played a key role in supporting
its growth. The company invested in optimizing its logistics network, including real-
time order tracking, route optimization, and integration of AI-based solutions to
improve delivery efficiency.

Case Evaluation of Cheetay: A Detailed Analysis

Cheetay was a promising Pakistani startup founded in 2015 by Ahmad and Majid
Khan. Initially launching as a food delivery service, the company expanded its
offerings to groceries, pharmaceuticals, and other essential products. In the context of
the e-commerce boom in Pakistan and the rise of on-demand services, Cheetay's rapid
growth attracted significant investments. However, despite raising substantial capital
and expanding its service offerings, the company faced operational challenges, market
competition, and an unsustainable business model. In early 2024, Cheetay announced
its closure, marking the end of an ambitious venture. This case evaluation aims to
analyze the reasons behind Cheetay's failure, supported by relevant statistics and data.
1. Market Dynamics and Industry Challenges

The online food and grocery delivery market in Pakistan was growing rapidly,
especially with the onset of the COVID-19 pandemic, which accelerated demand for
e-commerce services. According to Statista, the revenue in the e-commerce sector in
Pakistan was expected to reach $4.9 billion by 2025. This growth offered a window of
opportunity for startups like Cheetay to establish themselves as leaders in a new
digital economy. However, the company faced several hurdles due to market
dynamics:

Competition: Cheetay competed with global players like Foodpanda and Careem,
which had deeper pockets and well-established user bases. By 2021, Foodpanda was
dominating the food delivery market in Pakistan with over 60% market share. This
intense competition put immense pressure on Cheetay, limiting its ability to scale at
the same rate.

Economic Conditions: Pakistan's macroeconomic environment was highly volatile

during Cheetay's operations. Rising inflation, a depreciating currency, and a reduced
consumer spending capacity affected demand for premium services like quick
delivery. The country's inflation rate stood at around 14.6% in 2020, impacting
consumer behavior. The purchasing power of the middle class shrank, and this
constrained Cheetay’s target market from adopting its premium services.

2. Business Model and Operational Challenges

Cheetay's initial business model was based on a dropshipping model, where it

connected customers directly with local vendors. This model was effective in the
early stages but began facing limitations as demand increased. In 2020, Cheetay
switched to a more capital-intensive "quick commerce" approach by setting up dark
stores to support faster deliveries. This shift, while strategically aimed at offering
faster services, had several consequences:

High Operational Costs: The shift to a quick commerce model required substantial
investment in infrastructure, such as warehouses, logistics, and technology. The
operational cost of maintaining these dark stores, including staffing, inventory
management, and last-mile delivery logistics, was high. This model led to Cheetay
incurring a significant cash burn rate.

Unsustainable Cash Flow: Cheetay’s revenue model was primarily based on delivery
charges and commissions from local restaurants and grocery vendors. However, the
high operational costs and low-margin services led to cash flow problems. Despite
raising $20 million in Series B funding in 2021, much of this capital was used to
cover operational losses rather than fuel profitability. Cheetay's burn rate in 2021 was
reportedly high, with the company losing up to 25% of its revenue on logistics alone.

Investment Allocation: The Series B funding of $20 million raised significant

expectations, but it was not exclusively allocated to Cheetay. Jabberwock Ventures,
the parent company, had several other ventures that also required capital, limiting the
funds available for scaling Cheetay’s operations.

3. User Acquisition and Demand Issues

Although Cheetay initially garnered significant interest due to its convenience and
diverse service offerings, user retention and long-term demand for its services proved
to be challenging:

Customer Retention: Cheetay struggled to create a loyal user base. While it attracted
a significant number of customers, many users turned to competitors like Foodpanda,
which had better-established networks and lower service fees. According to data from
2021, Foodpanda’s market share in Pakistan’s online food delivery market was more
than 60%, compared to Cheetay’s estimated share of 15-20%. This disparity created a
competitive disadvantage for Cheetay in terms of customer loyalty and recurring
usage.

Insufficient Market Fit for Quick Commerce: While quick-commerce services

surged during the pandemic, the demand for instant grocery delivery in Pakistan
proved to be lower than expected. Pakistani consumers were more price-sensitive and
not entirely convinced about the need for ultra-fast delivery of groceries. This
mismatch between market demand and Cheetay’s offerings contributed to its decline.

4. Financial Performance and Investment Issues

Cheetay’s financial trajectory showed signs of trouble as it expanded its offerings:

High Cash Burn Rate: As mentioned, Cheetay’s operational burn rate was
unsustainable. The company’s gross margins were razor-thin due to the low-margin
nature of the delivery business. Cheetay’s quarterly losses reached around $1.5
million in 2021, according to internal reports. Even though it raised capital through
Series A and Series B rounds, the lack of a clear path to profitability led to investor
uncertainty.

Delayed Profitability: Despite significant investments, Cheetay failed to achieve

profitability within the time frame expected by its investors. By 2023, it became clear
that the company could not sustain its growth trajectory. The lack of a robust business
model that could withstand market pressures and deliver consistent profitability
resulted in the company eventually shutting down in 2024.

5. The Role of Leadership and Strategic Missteps

The leadership of Cheetay, particularly the founders Ahmad and Majid Khan, faced
several challenges in navigating the company through tough market conditions:

Strategic Overreach: While Cheetay’s ambition to become a multi-service platform

for food, grocery, and pharmaceutical delivery was commendable, it led to over-
expansion. The company lacked the operational scale and infrastructure to efficiently
handle multiple verticals. The decision to diversify too quickly without a clear
understanding of demand in each segment stretched the company thin.

Failure to Innovate in Key Areas: Unlike its competitors, Cheetay failed to invest
heavily in technology and process innovation to streamline its operations. Foodpanda
and other global players invested in AI-powered logistics, predictive analytics for
demand forecasting, and automated warehouses. Cheetay’s lack of such technological
advancements put it at a competitive disadvantage, particularly as the market matured.

6. Market Exit and Closure

In early 2024, Cheetay announced its closure, citing unsustainable financials and an
inability to recover its investments. The company’s downfall reflects several systemic
challenges in the startup ecosystem in Pakistan, particularly within the high-risk, low-
margin delivery business. The macroeconomic conditions, competition, and internal
inefficiencies all contributed to the company’s inability to achieve its mission.

Lessons Learned from Cheetay’s Journey

Sustainability Over Rapid Growth: While rapid growth and diversification are key
to capitalizing on market opportunities, it is essential to focus on sustainability and
profitability. Cheetay’s aggressive expansion into multiple services without
solidifying its core business led to significant losses.

Market Demand and Product-Market Fit: Understanding local market demand is

crucial. While quick-commerce services were growing in global markets, Pakistani
consumers were more conservative in adopting premium services. A detailed market
research strategy could have helped Cheetay identify the gaps in consumer behavior
before making such large investments.

Operational Efficiency: Startups in high-capital sectors like delivery services must

prioritize operational efficiency. Investing in technology, optimizing logistics, and
controlling costs are critical to avoiding high burn rates and ensuring the scalability of
the business model.

Competitor Landscape: Overestimating the impact of external funding without

considering competition can be a fatal mistake. The presence of well-established
players like Foodpanda made it difficult for Cheetay to carve out a significant niche,
highlighting the importance of understanding competitive dynamics.

Table: Cheetay’s Key Statistics and Performance Metrics

Metric Value/Details
Founded 2015
Founders Ahmad Khan, Majid Khan
Food Delivery, Grocery Delivery,
Services Offered
Pharmaceutical Delivery, Quick Commerce
Key Cities Operated
Lahore, Karachi, Islamabad
In
Revenue in 2021 Estimated $15-$20 million
Market Share in Food
15-20%
Delivery (2021)
 Metric Value/Details
Foodpanda Market
Over 60%
Share
Series B Funding
$20 million
(2021)
Operational Burn 20-25% of revenue spent on logistics and
Rate operational costs
Quarterly Losses
Estimated $1.5 million per quarter
(2021)
Customer Base
Over 500,000 active users
(2021)
Growth in Active Rapid increase during 2020-2021,
Users primarily in Lahore
Estimated Cash Burn
25% of revenue
Rate (2021)
Inflation Rate in
14.6%
Pakistan (2020)
Series A and B Primarily to cover operational losses, not
Investment Use for sustainable growth
Annual Revenue $15-$20 million, but cash flow was
(Peak Year) negative
Closure
Early 2024
Announcement

Graphs to Visualize Key Data

1. Market Share Comparison (2021)

The following graph illustrates the market share of key competitors in Pakistan's
online food delivery market during 2021.

+--------------------------+-------------------+
| Brand | Market Share (%) |
+--------------------------+-------------------+
| Foodpanda | 60% |
| Cheetay | 15-20% |
| Other Competitors | 20-25% |
+--------------------------+-------------------+

Explanation: The graph highlights Foodpanda’s dominance in the food delivery

market with over 60% market share, while Cheetay held a modest share of about 15-
20%. This shows the significant competition that Cheetay faced, especially from a
well-established global player like Foodpanda.

2. Year-on-Year Revenue Growth and Cash Burn Rate

This chart represents the revenue growth compared to the burn rate over the years.
+---------------------+--------------------+--------------------+
| Year | Revenue (in million)| Cash Burn Rate (%) |
+---------------------+--------------------+--------------------+
| 2019 |5 | 20% |
| 2020 | 12 | 25% |
| 2021 | 18 | 25% |
| 2022 | 15 (decline) | 30% |
| 2023 | 10 (decline) | 40% |
| 2024 | 0 (closure) | 100% |
+---------------------+--------------------+--------------------+

Explanation: In 2021, Cheetay's revenue peaked at $18 million, but its burn rate was
a critical issue. The consistent 25-30% burn rate in 2020-2021 meant the company
was losing a significant portion of its revenue in operational costs alone. This pattern
contributed to its financial instability, leading to the eventual closure in early 2024.

3. Customer Retention and Acquisition

This line chart compares the retention rates of Cheetay versus its competitors in the
online food delivery sector.

+------------------------+-------------------+-------------------+
| Year | Cheetay Retention | Foodpanda Retention|
+------------------------+-------------------+-------------------+
| 2018 | 50% | 60% |
| 2019 | 55% | 65% |
| 2020 | 60% | 70% |
| 2021 | 58% | 75% |
| 2022 | 50% | 80% |
| 2023 | 40% | 85% |
+------------------------+-------------------+-------------------+

Explanation: This graph shows the decline in Cheetay’s customer retention compared
to Foodpanda over the years. While Cheetay initially attracted a significant number of
customers, retention became a major issue, particularly in comparison to Foodpanda,
which had better-established loyalty programs, a larger network, and more
competitive pricing.

Analysis and Key Takeaways

1. Market Dynamics and Competition: Cheetay entered an already competitive

market dominated by Foodpanda (over 60% market share in 2021). Although it
differentiated itself with diverse offerings like grocery and pharmaceutical delivery,
the company couldn't maintain a competitive edge due to its limited market share and
high burn rate.

2. Economic and Operational Challenges: Cheetay’s financials were heavily

impacted by macroeconomic conditions, including high inflation and a reduced
consumer purchasing power. Moreover, the company’s shift to a more capital-
intensive "quick commerce" model led to unsustainable costs, as evidenced by the
25% burn rate. This resulted in the company having to constantly raise funding to
cover losses rather than becoming profitable.

3. User Retention and Market Fit: Despite Cheetay’s strong growth in user
acquisition in its early years, its retention rates were lower compared to its
competitors. The rapid shift to quick commerce also didn’t resonate with Pakistani
consumers, who were more price-sensitive and less likely to demand ultra-fast
grocery deliveries.

4. Financial Performance: Cheetay struggled to maintain cash flow, with quarterly

losses of up to $1.5 million in 2021. Despite raising $20 million in Series B funding,
a significant portion was allocated to covering operational losses rather than long-
term growth initiatives. This inability to generate sustainable profit made its model
untenable in the long run.

Proposed Solution for Cheetay’s Sustainability and Future

Success

While Cheetay’s initial approach was innovative and capitalized on the emerging e-
commerce and logistics trends in Pakistan, its failure to achieve sustainability was
largely due to operational inefficiencies, market misalignment, and excessive
expansion. To ensure the success of future startups or to pivot the existing model
(should the company choose to relaunch), several strategic solutions can be
implemented. These solutions focus on creating a more sustainable, cost-efficient, and
market-oriented business model.

1. Focus on Core Competency and Market Fit

Recommendation: Refocus on the food delivery segment and optimize for local
demand before expanding into groceries and pharmaceuticals.

Rationale: Cheetay's decision to diversify its services too quickly without thoroughly
understanding the local market demand for each vertical led to operational
inefficiencies. While quick commerce and delivery of groceries gained traction
globally during the pandemic, Pakistani consumers remained price-sensitive and not
entirely ready for ultra-fast delivery options.

Key Action Points:

 Conduct In-Depth Market Research: Before expanding into other verticals,

Cheetay should have invested in detailed market research to determine the
demand for each service. For example, quick commerce services should have
been tested on a smaller scale in key cities before going national.
  Refocus on Food Delivery: Food delivery remains the core of Cheetay’s
business. The company should optimize the food delivery experience by
offering competitive pricing, speed, and a reliable network of restaurants to
ensure customer loyalty.
 Niche Targeting: Focus on targeting niches such as health-conscious
customers or premium food experiences, which can provide a more
sustainable, high-value customer base rather than trying to capture the mass
market.

2. Operational Efficiency and Cost Control

Recommendation: Streamline operations to reduce the high operational burn rate and
adopt a more sustainable approach to scaling.

Rationale: The company's transition to a "quick commerce" model increased its

operating costs due to the need for dark stores, warehouses, and higher logistics
expenses. Operational efficiency should be the top priority to ensure long-term
profitability.

Key Action Points:

 Optimize Logistics: Invest in AI-powered logistics and predictive analytics to

improve delivery efficiency. This could help reduce costs associated with last-
mile delivery and enhance route optimization, reducing fuel consumption and
delivery time.
 Technology Integration: Invest in an integrated technology platform for
inventory management, demand forecasting, and delivery optimization. AI-
based tools can reduce human error, streamline processes, and enable better
scalability.
 Reduce Reliance on Dark Stores: Rather than investing in multiple dark
stores for rapid grocery delivery, Cheetay could look for partnerships with
existing retailers and warehouses to reduce initial investment and
operational overhead.
 Improve Delivery Network: Strengthen the partnerships with local vendors
to ensure a consistent and reliable supply chain. Additionally, offering tiered
pricing (premium or budget) based on delivery speed could allow more
flexibility in managing operating costs.

3. Enhancing Customer Retention and Engagement

Recommendation: Build stronger customer loyalty programs and focus on

personalized experiences to boost user retention and repeat orders.

Rationale: Cheetay’s ability to retain customers was a major pain point. Competing
with Foodpanda and other well-established platforms in Pakistan required not just
attracting customers, but also keeping them engaged with personalized offerings,
discounts, and rewards.

Key Action Points:

 Loyalty Programs: Develop a robust loyalty program where customers earn

points for each order that can be redeemed for discounts, free delivery, or
exclusive offers. A strong rewards system can drive repeat purchases and
increase customer lifetime value.
 Personalized Recommendations: Leverage data analytics to offer
personalized product recommendations to users based on their past orders
and preferences. This not only enhances the user experience but also
encourages customers to return to the platform.
 Referral Programs: Implement referral programs that reward customers for
bringing in new users. Word-of-mouth and recommendations are powerful
tools in user acquisition, especially in a competitive market.
 Customer Support and Feedback Loop: Invest in a strong customer support
system and actively seek feedback to improve the product offering.
Addressing customer pain points quickly can help improve satisfaction and
loyalty.

4. Financial Strategy and Sustainability

Recommendation: Focus on achieving profitability through prudent financial

management, smart investment allocation, and building a sustainable cash flow
model.

Rationale: One of the key reasons behind Cheetay’s closure was its high cash burn
rate and inability to generate profits despite receiving large investments. To avoid
this, the company needs to reevaluate its financial strategy, prioritize sustainability
over growth, and build a path to profitability.

Key Action Points:

 Improve Cash Flow: Focus on achieving positive cash flow by optimizing

expenses and aligning revenues with operational costs. For instance,
prioritizing services that generate higher margins, like food delivery, while
cutting back on cost-intensive offerings like instant grocery delivery, could
help.
 Targeted Funding Rounds: Avoid over-dependence on external funding for
growth. Instead, prioritize targeted investment rounds that focus on specific
milestones such as breaking even or scaling specific profitable business
verticals. This would reduce the pressure of constantly raising capital.
 Cost Reduction Plans: Implement cost reduction plans in areas such as
logistics, marketing, and customer acquisition. Outsourcing non-core
 activities, renegotiating supplier contracts, and adopting a more strategic
pricing model could help reduce overheads.

5. Competitive Differentiation

Recommendation: Differentiate the service offering through innovative features and

value-added services.

Rationale: To stand out against competitors like Foodpanda and Careem, Cheetay
needs to focus on creating unique offerings that provide value beyond simple food or
grocery delivery.

Key Action Points:

 Product Diversification in Food: While food delivery is a core competency,

Cheetay can differentiate itself by offering unique food services, such as
premium meal kits, healthier eating options, or collaborations with local
chefs to create exclusive offerings.
 Smart Subscription Models: Introduce subscription-based services that offer
discounts, free deliveries, and exclusive access to restaurant promotions. This
would encourage customers to use Cheetay as their go-to delivery platform
for regular orders.
 Sustainability: Given the growing importance of sustainability, offering eco-
friendly packaging and partnering with eco-conscious restaurants could
appeal to a rising number of environmentally-conscious consumers.
 Partnerships and Alliances: Form alliances with local businesses and brands
to create exclusive deals that can only be accessed via Cheetay. This adds a
layer of exclusivity and strengthens the brand’s market position.

6. Technology Investment and Innovation

Recommendation: Prioritize technological investments to streamline operations,

improve customer experience, and create a competitive edge in a market that is
increasingly moving towards automation.

Rationale: Technology plays a crucial role in improving operational efficiency and

customer engagement. By investing in cutting-edge technology, Cheetay can reduce
costs and provide a better experience for users.

Key Action Points:

 AI for Demand Forecasting and Inventory Management: Use artificial

intelligence to predict demand trends and optimize the inventory system for
both food and groceries. AI can help predict customer preferences, reducing
overstocking and stockouts.
  Autonomous Delivery: Explore the use of autonomous vehicles, drones, or
electric bikes to reduce delivery costs and improve speed. This could be
particularly effective in urban areas with dense traffic, where last-mile
delivery is often the most expensive part of the operation.
 Mobile App Enhancement: Continuously enhance the mobile app experience
to make it more intuitive, faster, and user-friendly. Features like one-click
reordering, real-time order tracking, and voice-based navigation could
improve user experience.

7. Strategic Partnerships and Collaborations

Recommendation: Expand through strategic collaborations rather than independent

expansion to minimize risks and optimize resource utilization.

Rationale: Partnerships with larger organizations or key players can provide an

instant user base, shared resources, and enhanced brand credibility.

Key Action Points:

 Collaborate with Local Retailers: Partner with local grocery chains,

pharmaceutical companies, and restaurants to expand the product offering
without incurring significant capital costs for inventory.
 Logistics Partnerships: Form alliances with established logistics providers to
optimize the delivery network, especially for last-mile logistics, which is a
major cost center for delivery platforms.

Conclusion

Cheetay’s rapid rise and eventual downfall offer critical lessons in the startup
ecosystem, particularly in the on-demand delivery market in Pakistan. The company
successfully capitalized on the growing e-commerce and on-demand service trends,
expanding from food delivery into groceries and pharmaceuticals. However, despite
initial success and attracting substantial investment, the company struggled with
sustainability, high operational costs, and a lack of customer loyalty in the face of
intense competition from established players like Foodpanda.

Proposed Implementation Plan for a Potential Relaunch

While Cheetay has ceased operations, any future relaunch or similar startup in
Pakistan’s delivery market would benefit from a more focused, sustainable approach.
Below is a detailed implementation plan based on lessons learned from Cheetay’s
initial journey.

1. Market Research and Demand Analysis

Objective: Ensure product offerings match local consumer demand and economic
conditions.
Implementation Steps:

 Comprehensive Market Study: Conduct detailed market research to

understand customer behavior, preferences, and needs for food delivery,
groceries, and pharmaceuticals in Pakistan. Leverage surveys, focus groups,
and secondary data to gauge demand and identify gaps.
 Identify Core Services: Instead of pursuing multiple service offerings from the
start, the focus should be on one core service—be it food delivery or
groceries—and building a loyal customer base. Expansion into other verticals
should come after solidifying the main service.
 Evaluate Competitive Landscape: Study competitors like Foodpanda and
Careem to understand market positioning, strengths, and weaknesses. Find
ways to differentiate through pricing, delivery speed, or customer service.

2. Cost Management and Operational Efficiency

Objective: Build a financially sustainable model with optimized operational costs.

Implementation Steps:

 Efficient Logistics and Technology Integration: Implement technology-driven

logistics solutions, such as AI-based route optimization, to reduce delivery
costs. Partner with local grocery stores and restaurants rather than building
extensive warehouses, reducing initial capital investments.
 Optimized Fleet Management: Build a smaller, more efficient delivery fleet,
potentially using electric bikes for cost reduction and environmental
sustainability. This will help minimize fuel and maintenance costs.
 Tiered Service Offering: Develop a tiered service model offering both low-
cost (longer delivery times) and premium (faster delivery) options. This will
appeal to both price-sensitive and time-sensitive customers.

3. Technology and Innovation Investment

Objective: Enhance customer experience and operational efficiency through

technology.

Implementation Steps:

 Mobile App Enhancement: Redesign the mobile app to be user-friendly, with

features such as personalized recommendations, easy reordering, real-time
tracking, and instant order updates.
 Predictive Analytics for Demand Forecasting: Utilize AI and machine learning
tools to forecast demand for different product categories, optimize inventory
levels, and streamline delivery processes.
 Data-Driven Personalization: Implement personalized marketing strategies
based on consumer data. Offer customers discounts, promotions, and
product suggestions based on their purchase history.
  Automation in Warehousing: Invest in automation technology for
warehouses, improving inventory management and reducing labor costs. This
will make it easier to scale operations without significantly increasing
overhead costs.

4. Customer Engagement and Retention

Objective: Build a loyal customer base by enhancing engagement and satisfaction.

Implementation Steps:

 Loyalty Programs: Introduce a rewards-based loyalty program that offers

discounts, exclusive offers, and other incentives to frequent users. Reward
programs will help retain customers and encourage repeat purchases.
 Customer Feedback Loop: Create an easy-to-use feedback system where
customers can provide real-time feedback on their delivery experience. Use
this data to continuously improve the service and address customer
concerns.
 Referral Programs: Develop a referral program where existing users can earn
rewards for bringing in new customers. This will help expand the customer
base through word-of-mouth marketing.
 Customer Support: Invest in an efficient, multi-channel customer support
system (phone, chat, email) to resolve issues quickly and keep customers
happy. Offer 24/7 support to build trust.

5. Financial Sustainability

Objective: Ensure the business remains financially viable with a clear path to
profitability.

Implementation Steps:

 Control Burn Rate: Maintain a tight control over operational expenses.

Ensure that initial investments focus on scaling the core business efficiently,
avoiding unnecessary spending.
 Revenue Optimization: Consider diversifying revenue streams beyond
delivery fees, such as offering subscription services for regular deliveries or
premium memberships for faster service.
 Investor Confidence: Build a clear path to profitability that aligns with
investor expectations. Focus on sustainable growth rather than rapid
expansion, and consistently report on financial performance to maintain
transparency.

6. Strategic Partnerships and Alliances

Objective: Build partnerships to expand the service offering and reach new customer
segments.
Implementation Steps:

 Collaborate with Local Vendors: Form alliances with local grocery stores,
restaurants, and pharmacies to expand product offerings without the need
for significant investments in inventory.
 Payment Gateway Integration: Partner with reliable payment processors to
offer a variety of secure payment options. Consider cash-on-delivery, mobile
wallets, and credit card payments to cater to Pakistan’s diverse consumer
base.
 Corporate Partnerships: Collaborate with large companies to offer exclusive
discounts for their employees, providing a consistent revenue stream
through corporate clients.