Delivery race among Indian grocery startups brings road safety risks

By Aditya Kalra and Abhirup Roy

NEW DELHI (Reuters) – Indian grocery startups are luring tech-savvy customers with the promise of deliveries within 10 minutes, sparking a boom in “quick commerce”, but heating up concerns about road safety as bike riders scramble to meet tight deadlines.

Competition is already intense in India’s $600-billion grocery retailing industry, populated by the likes of Amazon (NASDAQ:), Walmart (NYSE:)’s Flipkart and Indian billionaire Mukesh Ambani’s Reliance.

Now SoftBank-backed Blinkit and its rival Zepto are racing to hire staff and open stores in their bid to grab a share of the market by offering the convenience of delivery in 10 minutes, far lower than the hours, or days competitors take.

Their mission: pack groceries within a few minutes at so-called dark stores, or small warehouses in densely populated neighbourhood buildings, and send bike riders to nearby locations with about seven minutes to spare.

“It’s a threat to the larger players,” Ashwin Mehta, a lead IT sector analyst at India’s Ambit Capital, told Reuters. “If people get used to 10 minutes, those companies offering 24-hour deliveries will be forced to reduce their timelines.”

As activity grows, research firm RedSeer says India’s quick commerce sector, worth $300 million last year, will swell 10-15 times to touch $5 billion by 2025.

Blinkit and Zepto, started by two 19-year-old dropouts from Stanford, have caught consumers’ fancy, satisfying cravings for food and impulse shopping, as well as urgent needs for daily supplies.

“This is very convenient, it has made a lifestyle change,” said Sharmistha Lahiri, who now turns to Blinkit to fill the gap when ingredients suddenly run out in her kitchen, from tomatoes for soup to chocolate icing for a cake.

The 75-year-old, who lives in the city of Gurugram near the capital, New Delhi, was a keen user of Amazon and Indian conglomerate Tata’s online grocer BigBasket, but prizes Blinkit’s rapid response in such situations.

The unbeatable convenience of rapid deliveries is evident in Europe and the United States, where companies such as Turkey’s Getir and Germany’s Gorillas are expanding fast, but India’s accident-prone roads make quick commerce a dangerous business.

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

Blinkit and Zepto did not respond to queries from Reuters.

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