E-grocers like Grofers, Dunzo, BigBasket and Big Bazaar are in the race with similar promises, ranging from 15 minutes to two hours.
Humour me. Pick up your phone and order a bunch of groceries or daily essentials from your online grocer’s app. Now, head to the kitchen and make a cup of tea. While you’re at it, make a toast and slash a nice dollop of butter on it. Done? Bring your plate to the dining table or wherever it is that you eat. Now, drink the tea and eat your toast. Head back to the kitchen and wash the plate and cup. And before you dry your wet hands, your groceries will be delivered.
Dark magic? Not so much as the affable charm of quick commerce that has transfixed India’s e-grocery ecosystem. It is traditional e-commerce with special emphasis on last-mile delivery that is measured in minutes, not same day or certain slots the next day or the day after.
Last weekend, Swiggy took out front-page ads in The Times of India’s Sunday edition in Bengaluru, Delhi and Hyderabad. It was for Instamart, Swiggy’s grocery delivery offering. The writing was on the sheet, “... Now get groceries in 15-30 minutes.” And you cannot miss the dig at BigBasket with the mention of 'slots' that became ubiquitous with several e-grocers last year (2020).
The Bengaluru-based food delivery giant launched Instamart last year in Gurugram to capitalise on consumers’ need for quick doorstep deliveries of groceries during the COVID pandemic.
Please note Instamart is different from Swiggy Stores (launched in February 2019) that was the brand's marketplace model for grocery delivery. It was discontinued last year. Many brands who'd entered the e-grocery segment last year during the nationwide lockdown decided the pull the plug eventually. Some of the big names include Zomato, Paytm, and Domino's.
This claim from Swiggy Instamart is the latest in a line of quick delivery offerings from various e-grocers. Grofers offers 15-minute delivery. Dunzo claims to deliver your orders in half-an-hour. Expect BigBasket to take an hour under its express delivery scheme, and Big Bazaar will take two hours. It’s all about the minutes now. Same-day delivery is passe.
As per RedSeer Consultancy, “quick commerce penetration (India) within the online consumables market stands at seven per cent, and is expected to grow to 12-13 per cent by 2025.”
This promise of near-instant delivery did take us back to Domino’s Pizza’s '30 minutes' delivery offering that originated in India in the late 2000s.
While one can compare Domino’s delivery claim with e-grocers quick delivery offering, Nikita Bhargav, co-founder NittyGritti (ex-category marketing manager Amazon), is quick to point that “Domino’s was a success because it offered something (free pizza, if late). It’s a different strategy.” Unlike e-grocers, where we haven’t come across any consequence in case of late delivery.
How are these e-grocers able to deliver orders in such a short time? If you ordered, say, 15 items spread across vegetables, fruits, personal care items and kitchen essentials, wouldn’t the delivery executive go from one partner vendor/kirana store to another and collect all the items before racing towards your home?
Not really. The above mentioned process is called the marketplace model. E-grocers like Swiggy Instamart don’t depend on it and make use of 'dark stores', instead.
Think large warehouses, like supermarkets, that only service online orders. You order groceries on Instamart via the Swiggy app, a delivery executive gets the message and heads to the dark store, picks up your order in a jiffy (unlike restaurants, he doesn’t have to wait for the food to be prepared) and rushes to your home.
The major issue with the marketplace model that most e-grocers faced last year was the lack of items during pick up. You order a kilogram of India Gate rice and when the delivery executive arrives at the kirana store partner, he is told that India Gate is unavailable and only Dawaat is available. It’s not a nice scenario for the customer and the e-grocer.
With dark stores, something like this won’t happen because the e-grocer handles everything, from warehousing to listing available items to last-mile delivery. Please note that third-party folks handle these dark stores for e-grocers because of government rules.
Bhargav feels Swiggy has an edge here because its delivery executives are already on their bikes picking up the restaurant orders. It’s easier for Swiggy to service your grocery orders too.
Now, one may argue that the indulgence part for consumers is not just restricted to ordering food online. It also extends to those who love to cook, and their unplanned desire to whip up say a Thai dish is fulfilled in 30 minutes. That’s how fast Instamart will deliver the ingredients.
But the question remains, who’d want groceries delivered to him or her in 15-30 minutes? As Mahesh Murthy, a venture capitalist and head of Pinstorm, a digital marketing firm, put it “We don’t have palak (spinach) and tamatar (tomato) emergencies that we need them delivered in 15 minutes.”
As per RedSeer, “Gen Z are impulse purchasers and ambitious millennials dominate in unplanned purchases. Their fulfilment methods are based on speed and convenience.”
Different consumers respond to different carrots. While some respond to the speed of delivery, others will prefer to wait if it will fetch them discounts or cashback.
For Murthy, the whole premise of Swiggy Instamart’s 15-30 minutes delivery isn’t aimed at BigBasket, but is, instead, an effort to “differentiate itself from Zomato” after its IPO and billion-dollar valuations.
He references BigBasket and how it has pioneered the slots, and newcomers like Zepto that claim grocery delivery in 10 minutes. Swiggy, as per Murthy, has to take on these brands, while one-upping Zomato in the future.
“Think of Swiggy as a gate... It says now you can’t just order food from me, but groceries too and I will deliver anything anywhere very fast,” explains Murthy. He goes on to add that all of this from Swiggy is to “embed in people’s minds that there is another reason to buy from it.”
For K. Vaitheeswaran, founder and CEO, Again Drinks, “All online grocers are selling someone else’s items. There is nothing unique.”
He tells us that there are three pillars of e-commerce: selection, pricing and availability.
As per Vaitheeswaran, there is nothing new in selection, unless an e-grocer sells a private label and “pricing is very transient… It depends on how much money you have in the bank and how much you’re willing to lose. It is loss-making pricing… Oh, you are giving a 20 per cent discount, I will give 25 per cent off.” He went on to say that “the only differentiating factor is availability, i.e., how fast you can deliver.”
“If Swiggy Instamart can support its statement and consistently delivery correct items at decent pricing at the right time, then it’s doing a good job because it’s a hard market to execute,” he signs off.