Competition is fierce between Amazon, Flipkart, Reliance Industries and Blinkit and Zepto have added. But are people safe on the road?
The hunt has begun! Indian grocers lure tech-savvy shoppers with the promise of 10-minute deliveries, sparking a “quick commerce” boom, but road safety concerns are mounting as cyclists rush to meet tight deadlines. Competition is already fierce in India’s $600 billion supermarket chain, populated by the likes of Amazon, Walmart’s Flipkart and Indian billionaire Mukesh Ambani led by Reliance Industries. Now SoftBank-backed Blinkit and its rival Zepto are racing to hire staff and open stores in their bid to capture market share by offering the convenience of delivery in 10 minutes, far less than the hours or days required by competitors.
Their mission: to pack groceries in so-called dark stores, or small warehouses in densely populated neighborhood buildings, within minutes, and send cyclists to nearby locations with about seven minutes to spare.
“It’s a threat to the bigger players,” Ashwin Mehta, a lead IT sector analyst at Ambit Capital in India, told Reuters. “If people get used to 10 minutes, those companies that offer 24-hour deliveries will have to shorten their timelines.”
As activity grows, research firm RedSeer says India’s high-speed trade sector, worth $300 million last year, will grow 10-15 fold to $5 billion by 2025.
Founded by two 19-year-old Stanford dropouts, Blinkit and Zepto has captured consumer attention, satisfying food cravings and impulse purchases, as well as urgent needs for everyday necessities.
“This is very useful, it has brought about a lifestyle change,” says Sharmistha Lahiri, who now turns to Blinkit to fill the gap when ingredients suddenly run out in her kitchen, from tomatoes for soup to chocolate icing for a cake.
The 75-year-old, who lives in the town of Gurugram near the capital New Delhi, was an avid user of Amazon and Indian conglomerate Tata’s online grocer BigBasket, but praises Blinkit’s quick response in such situations.
The unsurpassed convenience of rapid deliveries is evident in Europe and the United States, where companies such as Getir in Turkey and Gorillas in Germany are growing rapidly, but India’s accident-prone roads make rapid trade a dangerous business.
“Ten minutes is very sharp,” said a former road secretary, Vijay Chhibber. “If there had been a (road safety) regulator, he would have said that this cannot be a company’s unique selling point.”
Blinkit and Zepto did not respond to questions from Reuters.
DANGEROUS ROADS, DRIVER LAWS
Even in cities, most roads are riddled with potholes, while livestock or other animals wandering in traffic are a frequent challenge for motorists, who often break ground rules.
Last year, the World Bank said India had one death on its roads every four minutes. Crashes kill about 150,000 people every year.
All 13 drivers for Blinkit and Zepto interviewed by Reuters in key cities of Mumbai, New Delhi and Gurugram said they were under pressure to meet delivery deadlines, often leading to speeding for fear of being reprimanded by store managers.
“We get five to six minutes and I feel tense and fear for my life,” said a Blinkit driver, who sought anonymity.
In August, Blinkit’s chief executive said on Twitter that riders were not penalized and could deliver “at their own pace and rhythm” as dark stores are always near destination locations.
Delivery people disagreed. In their haste, many of them told Reuters, they mark orders as delivered before they even arrive at their destination.
And if a customer complained about the practice, he risked a fine of 300 Indian rupees ($4.03). A screenshot of the Blinkit app provided by a driver showed the term MDND or “Marked Delivered, Not Delivered” used to denote such items.
Frustration was also seen in the conversation on a WhatsApp group of Blinkit riders in Mumbai, reviewed by Reuters.
“Ban these 10 minutes (delivery),” said one user, after photos were posted of a rider allegedly injured during a deadline.
The concerns reflect the dark side of India’s booming gig economy, in which workers often say they are falling short or struggling with difficult working conditions.
Blinkit calls its service “indistinguishable from magic” and says it aims to become a $100 billion company.
Valued at $570 million, Zepto has its sights set on becoming a $20 billion company, already backed by investors such as US-based Glade Brook Capital.
The instant delivery market is a $50 billion opportunity, India’s largest offline retailer, Reliance, said this month when it invested in Dunzo, another Indian startup offering a 19-minute delivery service.
But unlike most foreign companies that charge $2 to $3 per delivery, deliveries by Indian startups are usually free in a country with 1.4 billion potential customers.
“With free delivery, the business is unlikely to be viable,” said TN Hari, chief of human resources at BigBasket, which delivers most orders within five hours.
“And with a delivery fee making it viable, the market size is likely to be small.”
For now, Indians are addicted.
New Year’s Eve deliveries included more than 43,000 cans of soda, a Blinkit investor said on Twitter, adding: “33,440 condoms were ordered from @letsblinkit today. Someone ordered 80 condoms at once.”