Why 10-minute delivery depends on more than cheap labour, according to Walmart CTO

Low-cost labour and transportation are only part of what determines how quickly an order can be delivered, Walmart Global CTO and CDO Suresh Kumar said in an interview with CNBC-TV18’s Shereen Bhan.

Responding to a question on whether lower labour costs in India and China are driving the boom in 10-minute delivery, Kumar said speed depends largely on how accurately a retailer can predict demand and position inventory close to where customers are expected to need it.

He said this becomes easier in areas with high population density, pointing to metro cities in India and China as examples.

By contrast, lower population density in rural parts of India, China and the US can make rapid delivery more difficult.

“So multiple factors start going in. Labour and transportation costs are just only one of them,” Kumar said.

Not everything needs 10-minute delivery

Kumar said he expects faster delivery to have a role in developed markets such as the US as well, but through different delivery methods depending on the product and location.

He cited drone delivery as one example, saying Walmart is testing the technology in multiple markets and that it can reduce delivery times “quite dramatically”.

However, Kumar said retailers are unlikely to use the same delivery model or speed for every product.

“Not everything is going to be delivered at exactly the same time,” he said, contrasting bulky products such as furniture with everyday medicines such as a bottle of aspirin that a customer may want within 10 minutes because of a headache.

Walmart continues to test drone delivery

Walmart is still working on how drone delivery can be integrated into its broader supply chain, Kumar said.

The company is testing the technology across multiple markets and is assessing how products can be positioned at locations from where they can be delivered using drones.

Regulatory requirements are another factor that Walmart needs to work through, he said.

“This is an active area where we are continuing to invest in. It's very early for me,” Kumar said.

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