New Delhi: Indian grocery startup companies are appealing to tech-savvy shoppers with promises of delivery within 10 minutes, triggering the growth of “quick commerce” but heating fears about safety on the roads as cyclists scramble to meet deadlines.
There is currently lots of competition in India’s $600-billion retailing industry, which companies like Amazon India dominate, Walmart’s Flipkart, and Indian billionaire Mukesh Ambani’s Reliance Industries.
Now, SoftBank-backed Blinkit and its competition Zepto are racing to recruit employees and open new stores to capture an enviable share of the market. They offer a straightforward delivery service within 10 minutes, far less than the number of hours or days competitors need to take. Their goal is to pack groceries in just a few minutes in dark stores or small warehouses located in densely populated neighborhood structures and transport bike riders to locations nearby in just seven minutes have.
“It’s a threat to the bigger participants,” Ashwin Mehta, who is a principal IT sector analyst for Indian company Ambit Capital, told Reuters. “If people get used to ten minutes, those companies offering 24-hour deliveries will be forced to reduce their timelines.”
As the activity increases and the market expands, research firm RedSeer estimates that India’s fast commerce sector, valued at $300 million in 2017, is expected to grow by 10-15 percent to reach $5 billion in 2025.
Blinkit and Zepto, launched by two dropouts of 19 from Stanford in the US, have caught people attracted by their attractiveness, satisfying cravings for food and impulse purchases, and pressing requirements for everyday supplies. “This is very convenient. It has made a lifestyle,s change,” said Sharmistha Lahiri. She relies on Blinkit to fill in the gaps if ingredients run out of her kitchen, from tomatoes to make soup to chocolate frosting for cakes. However, the 75-year old resident of Gurugram was a frequent customer for Amazon and BigBasket. She appreciates Blinkit’s quick response to such circumstances.
The unparalleled convenience of speedy delivery is apparent in Europe and the United States, where companies like Turk’s Get and Germany’s Gorillas are increasing; however, India’s dangerous roads can make fast commerce risky. “Ten minutes is very sharp,” former road secretary Vijay Chhibber said. “If there were a (road safety) regulator, it would have said this can’t be a company’s unique selling point.”
Blinkit, along with Zepto, did not reply to requests from Reuters.
Dangerous roads, drivers are apprehensions.
Even in urban areas, many roads are filled with potholes. Moreover, cattle or other animals who wander into traffic are a common issue for motorists who often violate the basic guidelines. Accidents kill around 150,000 people every year. In the year 2000, it was reported by the World Bank said that India was a victim of the loss of a person every hour on the roads.
All 13 drivers from Blinkit and Zepto, who Reuters interviewed in significant towns that include Mumbai, New Delhi, and Gurugram, reported that they were under pressure to meet deadlines for delivery that often resulted in speeding up, fearing being told to stop from store management. “We get five to six minutes, and I feel tense and fear for my life,” said one Blinkit driver, who requested anonymity.
In August, the Blinkit chief executive’s statement on Twitter that users weren’t penalized and could operate “at their own pace and rhythm” since dark stores are always near the main sites.
Delivery drivers were not happy. In their rush, several of them have told Reuters that they marked orders as delivered before they even get to their destination. A Blinkit application screenshot shared by a driver revealed the phrase MDND, or “Marked Delivered, Not Delivered,” referring to such items. If a customer protested about this practice, the company could impose a fine of 300 rupees.
Reuters examined a sense of frustration during a conversation in a WhatsApp Group consisting of Blinkit users in Mumbai. “Ban this 10-minute (delivery),” said one user after photos were shared of a Blinkit rider believed to be injured in a rush of deadlines. These concerns indicate the darker aspect of India’s growing gig economy, where employees often complain of being inadequate or have to endure difficult working conditions.
Blinkit describes its service as “indistinguishable from magic” and declares that it is looking to be an industry worth $100 billion.
Zepto is estimated at $570 million and aims to be a $20 billion-dollar company. They are already being supported by investors like the American-based Glade Brook Capital.
The market for instant delivery is an opportunity worth $50 billion. The largest offline retailer in India, Reliance Retail Ventures Ltd., stated this month when it invested in Dunzo, another Indian startup operating the delivery service in 19 minutes.
However, in contrast to most foreign firms that charge between $2-3 per delivery, deliveries made by Indian startups are generally accessible in a country with an estimated 1.4 billion prospective customers.
“With free delivery, the business is unlikely to be viable,” said T.N. Hari. He is the head of human resources for the online store BigBasket, which can deliver most orders in five hours. “And with a delivery fee that makes it viable, the market size is likely small.”
As of now, Indians are hooked. The deliveries at New Year’s Eve featured over 43,000 bottles of fizzy beverages. A Blinkit investor tweeted on Twitter. He added, “33,440 condoms were ordered on @letsblinkit today. Someone ordered 80 condoms in one go.”
Reuters Aditi Shah, Chandini Monnappa, and Chris Thomas contributed to this report.