10-minute Delivery Startups
COVID brought with it a massive attitude change. Sitting on your butt all day and being bored to death doesn’t exactly ward off food cravings.
10-minute delivery startups are taking the e-commerce market by storm. While instant grocery and e-grocery in general were swimming in obscurity before the pandemic, COVID brought with it a massive attitude change. Sitting on your butt all day and being bored to death doesn’t exactly ward off food cravings. Shopping for groceries physically was the norm, especially in India. Fast forward to a couple of years later, e-commerce is booming. And now, we’re witnessing another culture change with these startups.
When the pandemic hit, brands like Bigbasket saw a huge increase in orders and were initially unable to handle them. You can’t blame them when moms were panic-buying months’ worth of groceries in a single day. Customers wanted quicker deliveries, and Aadit Palicha would give them exactly that. His brainchild, Zepto, is an app that delivers groceries in 10 minutes. Zepto revolutionized the quick commerce space, with competitors like Grofers and Bigbasket struggling to keep up. In order to stay relevant, Grofers rebranded itself as Blinkit, another 10-minute delivery e-grocery platform. Food delivery apps like Swiggy came up with their own versions of the same thing (Swiggy instamart is an example). But the main competitor of Zepto at the moment is Reliance-backed Dunzo.
So how do these platforms work and what gives them the edge over normal food/grocery delivery apps? They operate through ‘dark stores’, which are warehouses set up in dense neighbourhoods. With a network of strategically placed dark stores, they’re able to deliver goods quickly in a locality. The accessibility and the convenience offered by dark stores sets them apart. Financially too, they see a higher margin of profit. Physical stores have to spend a huge chunk of their profits on rent if they want to set up their store in a good location. But this isn’t a problem for e-grocery platforms as their warehouses are generally close to their target locality, not in it. This reduces expenditure on rent.
Moreover, the distances between these warehouses and consumers are minimum. This isn’t usually the case with restaurants, making instant delivery extremely difficult. When you only order food from a restaurant 20 kilometres away because their sauce tastes good, you can’t expect instant delivery, can you? But, to compete, they have to come up with a solution and desperate moves are being made. Zomato, for instance, recently announced that the food will be free if they fail to deliver it within 20 minutes.
Is this trend sustainable? In the short term, that doesn’t matter. Brands are fighting for survival, and this isn’t their focus. But there are some glaring issues that could potentially derail these startups. Firstly, there's the road safety concerns. Since the time window is extremely small, delivery agents face immense pressure and there have been instances of rule-breaking, accidents and injuries. The second issue isn’t obvious. Consumers are rapidly leaning towards instant gratification, and this isn’t good news for other sectors. A change in consumer expectations and behaviour will affect all sectors, not just e-commerce.
At the end of the day, the best services attract the most customers. Sustainable or not, 10-minute delivery startups have changed the scene, and have raised expectations. For now, they’re growing exponentially. And you can get your stuff delivered in a jiffy. It’s a win-win.