Consumer Staples

<p style="text-align: justify;">The future of 10-minute delivery startups is complicated.</p><p style="text-align: justify;">Despite spending much money, players like Big Basket, Blinkit, and Zepto struggle to remain profitable. They have begun charging shipping fees, which may drive customers to local Kiryana stores.</p><p style="text-align: justify;">Implementing the ONDC may result in increased competition and consolidation, with only a few players remaining. Traditional Kiryana stores may emerge as stronger competitors in this arena, while larger businesses such as Jiomart and Big Basket may need to work with them to acquire this market.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Sustainability of 10-minute Delivery&nbsp;</span></h2><p style="text-align: justify;">The success of these firms may hinge on their ability to solve the challenge of effectively providing small and large value orders. Only time will tell who the winners are in this highly competitive sector. &nbsp;</p><p style="text-align: justify;">The 10-minute delivery model will be sustainable only if they collaborate with the local Kiryana shops, and ideally, it can't be 10 minutes; it has to be 30 minutes or so, depending upon the urgency of the situation and if the customer wants to pay a premium for 10-minute delivery for 1-3 SKU per order. &nbsp;</p><p style="text-align: justify;">Or if they want to do so on their own, they will have to increase the order to 1-2k, but it also has to be 30 minutes as bigger orders will take more time to remain profitable.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/varinder-mahajan-a70296186/" target="_blank" rel="noopener">Varinder Mahajan</a></em></span><br />&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Varinder Mahajan&nbsp;</span></h3><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. Can 10-minute delivery startups compete with established players like Amazon and Walmart?&nbsp;</span></h2><p style="text-align: justify;">Amazon and Walmart are not there in 10 minutes delivery, so the comparison is valid. However, same-day delivery and next-day delivery will compete, and here the person who gives a better discount will win the game, but we will have to keep in mind that in the long run, everyone has to be profitable. We cannot service orders at a loss for an unlimited time.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. Will 10-minute delivery startups be able to expand beyond urban areas and into suburban and rural areas?&nbsp;</span></h2><p style="text-align: justify;">Technology will play a major role here, and if we can get the ONDC to that level as everybody has a mobile, the local shop owners can have the same-day delivery model for suburban/rural areas, as time is not a constraint here, and people have ample time in suburban/rural areas. &nbsp;</p><p style="text-align: justify;">But getting the local grocery store on ONDC, one company will have to take that lead and do so then, even the local grocery store can also participate in this revolution.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. Are 10-minute delivery startups able to achieve profitability, given the high cost of last-mile delivery?&nbsp;</span></h2><p style="text-align: justify;">Way to profitability lies in 1500 Rs to 2000 Rs order value delivered in 30 minutes to one hour if they want to do on their own in only bigger towns, where there is 5-6 Lac per days sales for store and suburban and rural towns, it is possible by collaboration with local grocery stores.&nbsp;</p><p style="text-align: justify;">&nbsp;<br />&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>