The recent central government intervention to stop quick commerce firms from making 10-minute delivery their USP has not come a day too soon. Two things must be noted at the outset. First, 10 minutes should
not be read literally. It should be interpreted to ban unrealistic and dangerous delivery timelines, say 12 minutes or 15 minutes, because if it is put in a straitjacket of 10 minutes, firms will resort to creative interpretation, much like airlines do to circumvent UDAN norms—you cannot charge more than Rs 2,500 if the flight is of less than one-hour duration; ergo, increase the time duration to one hour and five minutes.
Second, the ban is not directed at grocers, including greengrocers, alone. It extends to food delivery apps as well. For that matter, it applies to any delivery executed through any e-commerce portal.
The myth and mechanics of 10-minute delivery
It was never as if the 10-minute delivery promise was taken as holy writ. It was essentially a sales pitch, although it must be conceded that, on average, online orders were delivered within 25 minutes, thanks to dark stores being located close to customers—much faster than marketplace-model e-commerce firms, which on average deliver in two to three days.
Quick commerce delivery apps also resort to gimmicks, including freezing countdown clocks until the delivery partner is ready, to foster the image that the firm adheres to its timeline come what may. To wit, the last five minutes could remain frozen for 10 minutes before the countdown resumes.
Convenience at a human cost
Warts and all, Indian quick commerce firms have largely stuck to their promise of fast delivery. Late-sitters and shift workers often rely on them to order food at the last mile before reaching home. Elderly people unable to rush to nearby brick-and-mortar stores receive provisions as and when required, sometimes not minding delivery and handling charges for not meeting the minimum order size.
However, with time being of the essence for the firm, its delivery partner and the customer, delivery boys—almost invariably gig workers—often put their lives at risk through rash driving. Laden with bulky bags, they navigate roads precariously, leading to accidents that not only affect them but also other road users caught in the crossfire.
The real engine: dark stores
Quick commerce firms, however, are only feigning penitence. While they may remove the 10-minute sales pitch, their USP continues to be quick delivery—something not possible under the marketplace model practised by Amazon, whose numero uno status they have disrupted in a David-versus-Goliath fashion.
Their success is driven not only by risk-taking delivery partners but also by the quiet, ubiquitous omnipresence of dark stores, which remain inaccessible to the public. These cavernous warehouses stock almost everything customers need for daily life. Orders are routed through software systems, picked up by fleet-footed delivery boys and rushed to customers.
Dark stores are inscrutable as much as they are inaccessible. Customers are sometimes palmed off with old stock, particularly perishables such as vegetables. There is, therefore, a strong case for regulating dark stores as well. Instead, the government has chosen to address the low-hanging fruit—delivery riders menacing the roads.
From dark to bright stores
Quick commerce firms can pre-empt intrusive regulation by converting some dark stores into bright, neon-lit outlets open to the public. In the US, for example, weekly shopping trips to Walmart or Costco are routine, driven by rock-bottom prices from direct procurement and the crucial feel-and-touch advantage absent in e-commerce.
Such large-format stores are conspicuously absent in India. Multinational retailers have largely stayed away despite partial FDI liberalisation, now frayed through disuse. While the minimum investment requirement of US $100 million is manageable, the rider that 50 per cent of FDI be invested in backend infrastructure has acted as a deterrent.
Domestic quick commerce firms, however, are unencumbered by such restrictions. Some dark stores could be converted—either at the same location or nearby—into brick-and-mortar outlets open to the public, enabling dual use: walk-in shopping and online fulfilment.
The case for dual-use retail
Physical shopping satisfies touch-and-feel curiosity and encourages impulsive purchases, particularly among children and women, drawn by attractive displays. While e-commerce is largely need-based, brick-and-mortar stores enable comprehensive, wholesome shopping beyond immediate household requirements.
Brand building is also far more effective through physical showrooms than through digital interfaces, however well designed. Dual-use stores would serve both physical and online customers while eliminating the opacity of dark stores, though inaccessible stockrooms will always remain a necessary adjunct of retail.
What the government can do next
If quick commerce firms are reluctant, the government could usher in a second round of reforms by mandating front stores abutting stockyards, giving customers the option to buy physically or online.
Incidentally, dark stores are not unique to quick commerce. Marketplace firms also operate them for last-mile delivery, and these too have drawn criticism for poor hygiene and cleanliness.
S. Murlidharan is a freelance columnist who writes on economics, business, legal and taxation issues.
