Race for delivery among Indian grocery startups leads to road safety risks

  • 10-minute delivery times impress online shoppers
  • Rapid trade growth puts pressure on competitors
  • Road safety concerns rise in race for faster deliveries
  • Experts say companies could struggle to turn a profit

NEW DELHI, Jan 23 (Reuters) – India’s grocery startups are luring tech-savvy customers with the promise of 10-minute deliveries, sparking a “fast trade” boom, but stoking concerns about road safety as as cyclists jostle to meet deadlines.

Competition is already intense in India’s $600 billion food retail industry, populated by Amazon, Walmart’s Flipkart (WMT.N) and Indian billionaire Mukesh Ambani’s Reliance.

Now SoftBank-backed Blinkit and rival Zepto are rushing to hire staff and open stores in a bid to capture market share by offering the convenience of 10-minute delivery, far less than hours or days. what competitors are taking.

Join now for FREE unlimited access to Reuters.com

Register

Their mission: Pack groceries in minutes in so-called dark shops or small warehouses in densely populated neighborhood buildings, and send cyclists to nearby locations with about seven minutes to spare.

“It’s a threat to the big players,” Ashwin Mehta, senior IT sector analyst at Ambit Capital in India, told Reuters. “If people get used to 10 minutes, companies offering overnight delivery will be forced to reduce their lead times.”

As business grows, research firm RedSeer says India’s fast trade sector, worth $300 million last year, will grow 10-15 times to $5 billion. 2025.

Blinkit and Zepto, launched by two 19-year-old Stanford high school dropouts, captured consumer attention, satisfying food cravings and impulse purchases, as well as urgent needs for daily supplies.

“It’s very practical, it’s changed the way of life,” said Sharmistha Lahiri, who now turns to Blinkit to fill the void when ingredients suddenly run out in her kitchen, from tomatoes for soup to glaze in chocolate 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’s BigBasket online grocer and Indian conglomerate Tata, but appreciates Blinkit’s quick response in such situations.

The unbeatable convenience of fast 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 fast trade a dangerous business.

“Ten minutes is very sharp,” said a former road secretary, Vijay Chhibber. “If there was a (road safety) regulator, they would have said that can’t be a company’s only selling point.”

Blinkit and Zepto did not respond to questions from Reuters.

RISKY ROADS, UNFORTUNATE DRIVERS

Even in cities, most roads are riddled with potholes, while livestock or other animals straying into traffic pose a frequent challenge to motorists, who often break basic rules.

Last year, the World Bank said India had one death on its roads every four minutes. Accidents kill around 150,000 people each year.

All 13 Blinkit and Zepto drivers interviewed by Reuters in the key cities of Mumbai, New Delhi and Gurugram said they were pressured to meet delivery deadlines, often resulting in speeding for fear of being reprimanded by store managers.

“We have five to six minutes and I’m feeling tense and scared for my life,” said a Blinkit driver, who requested anonymity.

In August, Blinkit’s general manager said on Twitter that riders weren’t penalized and could deliver “at their own pace and at their own pace” because dark shops are always near destination sites.

The delivery men disagreed. In their rush, 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, they faced a fine of 300 Indian rupees ($4.03). A screenshot of the Blinkit app provided by a pilot showed the term MDND or “Marked Delivered, Not Delivered” used to refer to these items.

The frustration was also visible in the conversation on a WhatsApp group of Blinkit runners in Mumbai reviewed by Reuters.

“Ban this 10 minute (delivery),” one user said, after photos were posted of a runner who was allegedly injured in a deadline rush.

The concerns reflect the darker side of India’s booming economy, in which workers often say they feel aggrieved or struggle with harsh working conditions.

BULLISH

Blinkit calls its service “indistinguishable from magic” and says it wants to become a $100 billion company.

Zepto has been valued at $570 million and plans to become 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 that runs an online delivery service. 19 minutes.

But, unlike most foreign companies who charge $2-3 per delivery, deliveries from Indian startups are mostly free in a country with 1.4 billion potential customers.

“With free delivery, the business is unlikely to be viable,” said TN Hari, who leads human resources at online grocery store BigBasket, which delivers most orders within five hours.

“And with delivery charges making it viable, the market size is likely to be small.”

For now, the Indians are addicted.

New Year’s Eve deliveries included more than 43,000 cans of soft drinks, a Blinkit investor said on Twitter, adding, “33,440 condoms were ordered from @letsblinkit today. Someone ordered 80 condoms in once”.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Additional reporting by Aditi Shah, Chandini Monnappa and Chris Thomas; Editing by Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.

About Ethel Partin

Check Also

John Fetterman, Lieutenant Governor of Pennsylvania Senate candidate, stroke victim

Pennsylvania Lt. Gov. John Fetterman, who is running for the Senate in Tuesday’s primary, said …