The increasing use of internet and mobile devices has helped online retail growth in India in a big way. Having got used to any-time, anywhere ordering, convenient payment modes and delivery at desired destinations, the consumers are also demanding quicker deliveries. While it is difficult to manage the supply chains across the country, the hyper-local segment aims to procure goods from the nearest vendor and deliver in the shortest possible time. The initial euphoria and flush of funds saw the setting up of a large number of hyper-local units. The ground realities, however, are forcing them to rework their plans, with a number of consolidations and shut downs. This paper studies the factors behind the initial flurry and the issues that affect the sustainability and success of this segment.