Diageo ditches alcohol delivery app in India

United Spirits, the Diageo-controlled Indian drinks group, has exited its investment in Chennai-based booze delivery start-up Hip Bar, putting its plans for alcohol e-commerce on hold.

In June 2018, Diageo India splashed Rs 27 crore (US$3.96 million) to acquire a 26% equity stake in Hip Bar through its United Spirits arm.

At the time, the Johnnie Walker owner viewed Hip Bar – an app for home alcohol delivery – as a way into India’s e-commerce market, stating the start-up was “creating the right conduit for all players across the industry as it opens up a new and convenient route to reach consumers” in the country’s “complex regulatory environment”.

In 2019, United Spirits divested its Indian wine division Four Seasons in order to focus on its spirits business in the country, which included Hip Bar.

However, the firm has now decided to leave the delivery venture, selling back its stake to the start-up’s founder, Prasanna Natarajan, for Rs 52 lakh (US$69,839).

A Diageo India spokesperson said: “Since United Spirits Limited made a small investment in HipBar in 2018, e-commerce models have evolved significantly. We are excited about the potential for home delivery in the alcobev sector and will continue to work closely with government and industry to develop this channel and a model that will work for India.”

While India’s regulatory environment may not currently align with Diageo’s plans, the Covid-19 pandemic has led to a surge in alcohol e-commerce internationally.

Major players have recognised the market’s potential, such as when Uber acquired delivery service Drizly earlier this year.

More recently, Campari Group and Moët Hennessy partnered to build a premium European online business for wines and spirits.

For more on the e-commerce boom, read our analysis of the trend.