The 10-minute delivery model has hit a roadblock! Blinkit and Zepto's business model is in crisis; will the superfast service be shut down?
India’s rapidly growing quick commerce business is in jeopardy. In a sudden strike on New Year’s Eve, more than 200,000 delivery workers across the country refused to deliver food, groceries, and other orders. While the gig workers’ demands for fair wages and safety could be partially met by the platforms employing them, the union leading the protest wants a fundamental change: an end to 10-minute deliveries, a move that would be a major disruption.
According to a Bloomberg report, like elsewhere, Indian consumers’ desire for goods delivered in under half an hour began during the pandemic lockdowns – especially for everyday essentials. But while companies like Fridge No More, Byke, Jokr, and Getir shut down or disappeared in the US as shopping habits normalized, the Indian industry continued to grow by shortening delivery times and adding more items to its list of products, from pillows to medicines and food.
Dark Stores to Triple by 2030
According to the Bloomberg report, apps like Blinkit, Swiggy Instamart, and Zepto have invested heavily in so-called dark stores. These stores are strategically located warehouses that help fulfill online orders. Traditional retailers led by Mukesh Ambani and e-commerce giants like Amazon.com Inc. and Walmart Inc.’s Flipkart were late entrants to this sector, but are now also investing heavily. Real estate broker Savills PLC estimates that the number of dark stores will triple from 2,500 to 7,500 by 2030, as the demand for 10-minute deliveries spreads to smaller Indian cities.
The Debate That Has Been Sparked
The gig workers’ strike has sparked a debate about the cost of this addiction. The apps claim they don’t put undue time pressure on the drivers. But delays translate into poor ratings, angry calls from supervisors, and financial penalties, forcing riders to take risky drives on narrow, congested, and potholed roads that are already notorious for a death every three minutes. In the capital, New Delhi, venturing onto the roads means constant exposure to dangerously polluted air.
Quick-Commerce Companies' Shares Plummet
Even before the recent disruption, investors were spooked by demands for better social security for gig workers under India’s new labor codes. Since mid-October, shares of Swiggy Ltd. and Eternal Ltd. (which owns food delivery service Zomato and quick-commerce app Blinkit) have fallen by about 20%, while the benchmark Nifty 50 index has remained largely stable, according to a Bloomberg report. The sudden strike has further complicated the situation. If regulators order consumers to be a little more patient — or tell workers not to get frustrated — the business model could collapse before it even becomes profitable.
Zomato Founder Explains the Math
The new giants of quick commerce are trying to prevent such an outcome. In several posts on X, Eternal CEO Deepinder Goyal blamed “a few mischievous elements” for disrupting agents who weren’t striking. He said the strike hadn’t affected operations, with the number of orders reaching a lifetime high of 7.5 million on December 31. But even while dismissing the strike, Goyal has gone to considerable lengths to address the growing social concerns.
He says the mandatory 10-minute rule isn’t encouraging unsafe driving — Blinkit riders cover an average distance of 2 kilometers (1.2 miles) at a speed of 16 kilometers per hour. The company covers the drivers’ insurance premiums. Finally, on average, an employee earns ₹102 ($1.13) for every hour they are logged in. (Tips are extra, but negligible.) For someone working 10 hours a day, 26 days a month, after deducting fuel and vehicle maintenance costs, this amounts to ₹21,000 per month. He asked on X, “Now tell me, is this unfair? Especially for an unskilled job, which is mostly part-time and has no entry barriers?”
Goyal's Flawed Argument
Goyal's own data reveals the flaw in this model. In his hypothetical example, very few people are actually putting in the effort required to earn ₹21,000 per month. In a year, a Zomato delivery worker worked an average of 38 days, or seven hours a day. Only 2.3 percent of employees worked more than 250 days. If gig work is a viable alternative to urban poverty and a lack of formal sector jobs, then surely more people would be trying to maximize their earnings on this platform.
No Shortage of Labor in India
One possible reason is that the vast surplus of labor in India makes it difficult for gig workers to consistently meet their earning targets, and quick commerce is not immune to this. Millions of riders voluntarily leave the platform every year, and millions more join, but customers still face delays in getting their orders picked up and delivered.
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