10-min deliveries – Solving problems that don’t exist. Why?

Hyperlocal startup
Hyperlocal Startup Backdrop

Good tech – bad tech has always been the discussion, and today a new chapter has been opened in the same series. Technology has taken centre stage in Indian business, and hyperlocal startups are at the epicentre of it. The competition is stiff. However, there is an unusual trend amongst the services – instant delivery! India has usually accepted all kinds of technological advances, upgrading our technology-assisted habitat each time. However, the idea of quicker deliveries seems like a solution to a problem that doesn’t exist. Rather, it’s a solution that needs a problem!

Have a look at the announcements of various delivery times promises –

  • Zepto – 10 minutes
  • Ola Store – 10-15 minutes
  • BlinkIt (rebranded from Grofers) – 10-15 minutes
  • Swiggy Instamart – 15-30 minutes
  • Dunzo daily – 19-29 minutes
  • Bigbasket – under 60 minutes
  • Flipkart Quick – 90 minutes
  • Amazon Fresh – 120 minutes
  • Milkbasket – 7 am deliveries
  • Now, Zomato – 10 minutes

Is it because of demand?

The issue in this context is the fact nobody asked for faster delivery. Yes, given the option to get something delivered faster than expected time, people will definitely lean towards faster speed, however, from an innovation point of view, it does not solve a significant problem, rather, seeks to create an artificial problem and then solve it. In a world where we already have so many unsolved problems, why are startups solving artificial problems?

Is it because of the product?

This leads us to a question, who asked for it? Indian roads are already full of rogue riders driving dangerously. In an over-populated country, with road traffic a major problem in metro cities, and delivery boys already cramping the roads, we don’t want more pesky riders disturbing our daily routes. And it’s not like they are providing emergency services. The latest to join the race is Zomato who unlike others delivering groceries, dairy and packaged products, has promised to deliver freshly prepared food in 10 minutes. It would have been more logical if pharmacy companies were opting to deliver instant medicines, however, no e-commerce companies have so far made any such attempts.

Is it because of the profitability?

What’s more surprising is that these rapid deliveries also don’t make any commercial sense. Faster deliveries require significantly larger investments without any corresponding incremental returns. Are the deliveries at higher premium prices? No. Are they increasing customer base or geographical coverage? Most probably not. And yet, a war has begun on a service that nobody wants and the cash burn is huge. Most of these companies have already spent huge sums of investor money to establish themselves in the market, and instant 10-minutes deliveries are only going to further burden the company’s balance sheet. So despite all these factors, why is the 10-minute delivery idea still being backed? In a country where ambulances don’t reach in 30 minutes yet, why are groceries and food under 10 minutes?

Its’s technology, not racing skills!

The hyperlocal delivery service companies who promise this innovation, argue that the faster delivery time is possible not on the back of the racing skills of their riders, but the combination of predictive technology and local hubs that reduce travelling time. Given their track record so far, it is hard to believe that they wouldn’t squeeze out more from their delivery boys in the name of efficiency. However, it is not the first time this is happening in India. Remember, 30-minutes Pizza promise?

18 years ago when Domino’s announced Pizza deliveries in under 30 minutes, people didn’t believe their claim, however, we know it today, Domino’s has done it, and it’s not at the cost of their drivers’ lives! The speed limit of delivery vehicles is limited to 45 kmph. What Domino’s did was – map their menu, open stores in dense localities, and made their riders remember all city locations. And to do it consistently, they started forecasting orders – preparing their menu according to the probability of ordering a particular item. They also scientifically re-engineered their pizza preparation process to ensure it can be cooked within 10-15 minutes.

Most probably Zomato too has a similar plan – incorporate cloud kitchens in dense areas with more demand, deploy prediction algorithms for popular food items (as they have the database of billion orders served to date), and build a separate 10-minute menu, different from the regular menu. Zomato recently invested USD 5 million in Mukunda Foods, a company that specialises in food robotics. So, it is possible with automation and technology to deliver certain food items in under 10 minutes, however, one question remains unanswered – Why? When Domino’s did it, people were excited about the novelty, however, in Zomato’s case, public opinion is altogether divided.

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Why the race for faster delivery?

When Deepinder Goyal, the Zomato Co-founder, announced the 10-minute food delivery service, he also said that the company doesn’t want to do it, however, it is the popular chorus and everyone is chipping in, seemingly in unison. So, the real story is that it’s not about you – the customers. It’s about the competition. Zomato like any other company desires to be a leader in its industry vertical and also maintain that position for the foreseeable future. This means it not only has to fight the existing competition but also the expected competition that might crop up in the future. Zomato and other companies who have joined the race, already deliver food and groceries in 30-minutes or a day. It may happen that in future, a new startup might come up with a proposition of shorter delivery times. It’s like either they do it, or somebody else will. They have invested millions and billions in the market that they created for themselves. It’s obvious, that they don’t want a looming threat of a new entrant beginning a new cash war altogether. Zepto did it to Grofers and Big Basket, and certainly, somebody else will do it to Zomato and Swiggy. And thus, in anticipation, the companies have already begun these services to hinder any new entrant into the market they have built for themselves. It doesn’t matter if you order or not, or if the service becomes popular. The fact that there are service providers who already cater provide this service would act as a deterrent to new entrants.

The bottom line

It is difficult to account for the human consequences of actions stemming from technological impulses. The system will take its toll on executing it. Digital technology has enabled us in several dramatic ways, however, there should be a limit to what it can expect the physical world to deliver. Probably this war is not going to end till people and goods teleport themselves. The delivery through drones is already knocking on the doors, with the Government supporting the development of the same. More importantly, there’s a real danger of getting used to such service standards that it becomes impossible to revert to the more financially prudent options, in future.

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