BENGALURU: In metro cities of the country, the startup trend is seamlessly striding and is grabbing attention of the international business investors. But, is it a good notion to expand startup business to tier II and III cities? Down goes the current trend as reported by the dna.

Recently, many startups who had their business operation outside the metro cities have relinquished their operations reasoning technical aspect. But, none of them have resumed their business in tier two cites since the shutdown. Relative, industry experts say consider it as shun off by the companies to avoid further losses.

Zomato, a restaurant discovery and food ordering app that gave up its operation in four Indian cities that means, it will sack around 300 employees. The company could not deliver the same performance in Tier II cites as it did in metro cities. Similarly the E-commerce grocery delivery company Grofers also had comparable setbacks out of major business cities, due to which, it announced operational shut down in various cities including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam.

Both companies have claimed the same reasons for layoffs, despite of wide marketing strategies; they failed to receive the estimated response from the town based population. Some industry experts cite the development as still an inception and lots of other companies are expected to join the team.

Harminder Sahni, Managing Director, Wazir Advisors, said "To fulfill this, start-ups look to expand their offerings in newer markets. However, what would work in cities doesn't necessarily work the same way in tier II and III towns. This is because the buying and consumption behaviour is very different there. However, when it comes to customer acquisition costs, it is more or less the same, which then puts more pressure on the business of the start-up leading to such drastic steps by their respective management."    

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