Indian grocery startups are enticing tech-savvy consumers with the guarantee of 10-minute deliveries, igniting a surge in “quick commerce” while also raising concerns about road safety as bike riders rush to meet tight deadlines.
Amazon, Walmart’s Flipkart, and Indian billionaire Mukesh Ambani’s Reliance are among the companies competing in India’s $600-billion grocery retailing business.
Now, Blinkit, which is sponsored by SoftBank, and its competitor Zepto are racing to hire people and open storefronts in order to gain a part of the market by offering the convenience of delivery in 10 minutes, rather than the hours or days that competitors take.
Their goal is to pack groceries ordered in just a few minutes at the so called dark stores, or small warehouses in heavily populated neighbourhood buildings, and send riders on bikes to nearby sites with approximately seven minutes to spare.
“It’s a threat to the larger players,” said Ashwin Mehta, a lead IT sector analyst at India’s Ambit Capital,. “If people get used to 10 minutes, those companies offering 24-hour deliveries will be forced to reduce their timelines.”
According to RedSeer, India’s rapid commerce sector, which was valued $300 million last year, could increase 10-15 times to $5 billion by 2025.
Blinkit and Zepto, two 19-year-old Stanford dropouts, have piqued consumers’ interest by meeting culinary and impulse shopping appetites, as well as urgent demands for daily necessities.
“This is very convenient, it has made a lifestyle change,” said Sharmistha Lahiri. When Lahiri’s kitchen runs out of ingredients, from tomatoes for soup to chocolate icing for a cake, she goes to Blinkit to fill the void.
The 75-year-old, who resides in Gurugram, near New Delhi, was a frequent customer of Amazon and Tata’s online grocer BigBasket, but he prefers Blinkit’s quick reaction in emergency situations.
Rapid deliveries are unrivalled in Europe and the United States, where companies like Getir in Turkey and Gorillas in Germany are rapidly expanding, but India’s accident-prone highways make speedy commerce a deadly business.
“Ten minutes is very sharp,” said a former road secretary, Vijay Chhibber. “If there was a (road safety) regulator, it would have said this can’t be a company’s unique selling point.”
There were no comments on the issue from Blinkit and Zepto.
Even in cities, most roads are littered with potholes, and cattle or other animals straying into traffic pose a constant challenge for drivers who frequently break fundamental traffic rules.
According to the World Bank, India has a traffic death every four minutes. Every year, over 150,000 people are killed in car accidents.
All 13 Blinkit and Zepto drivers interviewed by Reuters in the important cities of Mumbai, New Delhi, and Gurugram said they were under pressure to fulfil delivery deadlines, which often resulted in speeding to avoid being reprimanded by store management.
“We get five to six minutes and I feel tense and fear for my life,” said one Blinkit driver, who sought anonymity.
Blinkit’s CEO remarked on Twitter in August that because dark stores are always near destination sites, riders are not penalised and may deliver “at their own leisure and rhythm.”
Riders on the delivery truck disagreed. Many of them told Reuters that in their haste, they stamp orders as delivered even before they arrive at their destination.
Customers who complained about the practise were subject to a fine of 300 Indian rupees ($4.03). MDND, or “Marked Delivered, Not Delivered,” was used to mark such products in a Blinkit app screenshot provided by one driver.
Frustration was also evident in a Reuters-reviewed exchange on a WhatsApp group of Blinkit riders in Mumbai.
“Ban this 10-minute (delivery),” said one user, after pictures were posted of a rider said to have been injured in a deadline rush.
The worries reflect the shadow side of India’s burgeoning gig economy, in which workers frequently complain about being shortchanged or facing difficult working circumstances.
Blinkit claims that their service is “indistinguishable from magic,” and that it aspires to be a $100 billion company.
Zepto has a market capitalization of $570 million and has set its sights on becoming a $20 billion company, with investors such as Glade Brook Capital in the United States.
Reliance, India’s largest offline retailer, said this month that the instant delivery market is a $50 billion opportunity when it invested in Dunzo, another Indian startup that offers a 19-minute delivery service.
However, unlike most Western companies, which charge $2 to $3 every delivery, Indian startups deliver for free in a country with a population of 1.4 billion people.
“With free delivery, the business is unlikely to be viable,” said T.N. Hari, who heads human resources at online grocery BigBasket, which delivers most orders within five hours.
“And with a delivery fee that makes it viable, the market size is likely to be small.”
For the time being, Indians are addicted.
More than 43,000 cans of fizzy drinks were delivered on New Year’s Eve, according to a Blinkit investor on Twitter “Today, 33,440 condoms were ordered through @letsblinkit. Someone placed an order for 80 condoms at once.”
(Adapted from Reuters.com)