In a year of soft launching of its e-commerce venture Golden Harvest Servus, Golden Harvest Agro Industries Ltd (GHAIL) has decided not to move forward with the planned investment of Tk5 crore for the firm's 45% stake, according to a disclosure.
The listed company cited an "unstable economic outlook" as the reason to opt out of the e-commerce platform that started a year ago aiming at food, grocery and medicine delivery as well as restaurant booking businesses.
The market for each of the segments was growing fast then, partially fuelled by continuous discount campaigns by top players backed by venture capital or deep pocket investors.
However, the tightening liquidity in the global financial markets made the investors a little conservative in funding growth-hungry discount-dependent startups, apparently increasing challenges for the businesses.
Uber stopped its food delivery wing UberEats during the pandemic, followed by the same by Shohoz, another venture capital-backed startup, while Daraz's food delivery subsidiary Hungry Naki has significantly downsized its operations this year, leaving Foodpanda and Pathao Food to operate without any significant competition in food delivery business.
Also, the grocery delivery market is crowded enough with dominant players like Chaldal, Panda Mart and Daraz Mart which left little room for shallow-pocketed new entrants.
The Ponzi schemes in the name of e-commerce that collapsed last year, leaving several hundred thousand customers and thousands of sellers defrauded, hurt online shoppers' confidence.
Amid so many challenges, the GHAIL board decided that "It would not be prudent to move forward with the planned investment in the e-commerce platform and also decided not to proceed with the investment."
GHAIL shares remained unchanged at Tk18.3 on Monday on the Dhaka Stock Exchange.