Ola Electric Opens 3,200 Stores Amid Year of Consumer Complaint Woes

Ola Electric Mobility announced opening of 3,200 new stores in a single day, as India’s biggest e-scooter maker seeks to expand its local footprint and address customer frustration related to shortcomings in service.

The Bengaluru-based company has increased the number of showrooms and service centers to 4,000, Ankush Aggarwal, group head of financial services and retail auto business, said at an event Wednesday. Shares rose as much as 6.4 percent on Thursday during Mumbai trading, outrunning the gains in S&P BSE Sensex.

The company, led by co-founder Bhavish Aggarwal, is looking to penetrate India’s small towns as well as bolster its after-sales service. “By leveraging its direct-to-consumer (D2C) model, Ola is ensuring that EV ownership becomes a reality for every household,” the company said in an exchange filing last week.

Ola Electric’s single-day store launch blitz shows its attempts to expand market share — and bolster its reputation — after a tumultuous year, marked by a blockbuster listing in August followed by an onslaught of consumer complaints, regulatory scrutiny and a heated spat between Aggarwal and a stand-up comedian.

The store launch blitz was initially expected on December 20 but later pushed to December 25.

The massive rollout comes a couple of months after it got slammed by service and performance-linked customer complaints. A monthly runrate of 80,000 such complaints were overwhelming its service centers, according to local media reports.

Videos and photos of malfunctioning Ola Scooters circulating on social media while Aggarwal had a social media altercation with an Indian comedian, who criticized the company’s flagship model.

Reputational Turnaround

“Their service network is an area the company is trying to address” as it scripts a reputational turnaround, Jinesh Gandhi, analyst at Ambit Capital Pvt., told Bloomberg News.

India’s heavy industry ministry ordered an audit of the firm’s servicing hubs in October, Reuters reported, and the Central Consumer Protection Authority served a notice in October over alleged violation of customer rights, misleading ads and unfair trade practices.

This has led to market share loss for the sector leader — it dropped to 24.5 percent in November versus 32.6 percent in the same month last year. Ola Electric shares are now trading about 35 percent lower from their peak in August after the strong listing.

© 2024 Bloomberg LP