The aggressive delivery promise has resonated with India’s aspirational middle class, but it has also attracted criticism from political circles and labour unions. - Bloomberg
NEW DELHI: India is asking quick commerce companies to drop their 10-minute delivery promise amid mounting concerns that the ultra-tight deadlines are worsening safety and working conditions for gig workers.
Federal Labour Minister Mansukh Mandaviya met last week with executives from major instant delivery firms - such as Eternal Ltd’s Blinkit, Swiggy Ltd.’s Instamart and Zepto - to discuss measures to improve safety, and working conditions for riders who deliver goods to customers within minutes, according to people familiar with the matter.
Blinkit, India’s top rapid commerce firm, has already removed the 10-minute delivery assurance from its mobile application branding, said the people, who asked not to be named as the discussions weren’t public. Rivals are expected to follow soon.
Blinkit, Zepto, Swiggy and the labour ministry didn’t respond to requests for comment.
Shares of Eternal, which have more than quintupled over the past three years, were little changed in early Mumbai trading, while Swiggy fell 1.9%. Zepto is working toward an initial public offering.
India has emerged as a rare success in super-fast deliveries, drawing billions of dollars from global investors such as SoftBank Group Corp. and Temasek Holdings Pte., even as similar models have collapsed in the US, Europe and parts of Asia.
The sector relies on tens of thousands of gig workers to deliver everything from iPhones to shampoos to customers from dark stores or small warehouses.
The aggressive delivery promise has resonated with India’s aspirational middle class but it’s also attracted criticism from political circles and labour unions.
Companies say gig works are not contractually bound to meet the 10-minute deadline and are not penalised for delays, arguing that the proximity of dark stores underpins the model rather than speed pressure.
Raghav Chadha, a lawmaker from India’s Aam Aadmi Party, who campaigned aggressively against quick deliveries, congratulated delivery riders on the "big victory.”
The new government directive pushes companies to soften their consumer-facing messaging, but day-to-day operations are unlikely to change drastically in the near term, according to analysts.
There is no mandate for the companies to slow down deliveries as they compete for customers in India’s cut-throat e-commerce industry.
The removal of the 10-minute catchline is largely "optics-driver than than business altering,” Karan Taurani, an analyst at Elara Capital, said in a note. Maintaining superior delivery time is critical to defending market share versus traditional e-commerce, he said.
"While the tagline acted as a performance yardstick, its absence may be neutral for weaker operators and beneficial for strong executors focused on consistency over marketing claims,” Taurani said.
This month, the chief executive officer of market leader Eternal, Deepinder Goyal, defended the quick commerce business model during a heated online debate with critics. Delivery drivers aren’t overworked, with the average driver on his company’s Zomato platform working 38 days in the year - highlighting the gig nature of the job, he wrote on X.
"Specifically with respect to our quick commerce business Blinkit, there is no change in business model that could have any material impact on the company,” Eternal said in a disclosure to stock exchanges late Tuesday. - Bloomberg
