Tag: Grocery Delivery

Dunzo defers June salaries for employees, no layoffs, says sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Grocery delivery platform Dunzo has decided to defer less than 50 percent of the salary of its employees for the month of June, CNBC-TV18 has learnt from sources close to the company.

The development comes after the quick commerce platform cut its workforce by 30 percent, meaning close to 300 employees were laid off in April in its second round of job cuts. Dunzo had also secured funding worth $75 million and both moves were targeted at the delivery platform turning profitable before its initial public offering (IPO) in 2025.

While reports suggest that the decision was primarily due the company facing issues managing its cashflows, sources close to the company told CNBC-TV18 said, the company was not struggling financially and the move has been made due to certain shift in priorities within the company.

Sources also denied reports on layoffs happening soon, saying no such talks are happening within the company. An Economic Times report had suggested that the quick commerce may finalise its plans to terminate more jobs.

Bengaluru-headquartered Dunzo reported a net loss of Rs 464 crore in FY22. This showcase a twofold spike from reporting a net loss of Rs 229.1 crore in FY21. According to company’s annual financial reports the rise in operational cost led to the spike in loss.

Dunzo lost Rs 230 on each Dunzo daily order during the first half of 2022 that is from January to June. EBITDA loss in June was Rs 176 crore. The company is yet to disclose its financials for FY23.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Explained: The flipside of instant grocery delivery services

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Instant grocery delivery services have seen a boom of sorts over the past year. Amidst the COVID-19 lockdowns and movement restrictions, the convenience of having groceries delivered straight to our homes, at times within just 15 minutes, has been a major driver of their popularity.

In Europe and US, several startups like Getir, Gopuff, Jokr and Gorillas have set up numerous dark stores — mini warehouses that can support grocery delivery within 15 minutes or less. Closer home, services like Swiggy Instamart, Grofers, BigBasket and others are starting to capitalise on the attractiveness of instant grocery delivery.

Also read: Post-pandemic tech trends that will reshape future of Indian retail industry

But convenience often comes at a hidden cost. And the first ones to feel the pinch are retail brick-and-mortar stores. As small stores are unable to compete with multi-million, and sometimes multi-billion dollar enterprises in terms of logistics and convenience, they have no choice but to go out of business. In the US, this has already translated into empty storefronts and vacant corner shops across once busy streets.

Also read: Zepto, a 10-minute grocery delivery app in India, raises $60 million

More vehicles, less stores

The rise of delivery services also means that there are more vehicles on the city streets than before. Bicycles,  mopeds, scooters, bikes and other means in the future will continue to tax the infrastructure of each city, as delivery services try to cover each nook and cranny of the growing urban regions of the world. The environmental costs will be particularly high, as express delivery services necessitate the use of delivery vehicles being sent under full capacity.

Under the threat of such services, the urban fabric of community, which is often knitted around the areas of shopping, commerce and retail areas, gets unravelled.

Also read: How retail tech is shaping the way people shop

Cities like Singapore are already working on plans to restore some of their retail zones to their former glory by diversifying the use of building lots. But as the rise of ride-hailing services highlighted, policymakers must prepare to support the brick-and-mortar stores while also embracing the convenience of instant delivery services.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ola likely to foray into grocery delivery soon

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ride-hailing app Ola is likely to enter the competitive grocery delivery and hyperlocal segment soon, sources aware of the matter told CNBC-TV18 on Tuesday.

This, however, is not the first time the firm will attempt to venture into the category. Earlier in 2015, Ola had launched its grocery delivery business called Ola Store as a separate app in several cities, starting from Bengaluru.

However, the segment did not take off then mainly due to poor demand and increasing costs, sources said.

Ola has not commented on the development yet.

Vinay Bhopatkar, who joined the firm in August this year, is heading Ola’s delivery business. He has earlier been associated with Cafe Coffee Day, Aditya Birla Fashion, and Asian Paints.

Also Read: IPO-bound Ola’s COO and CFO to exit the company

On Tuesday, Bhopatkar was also made in-charge of Ola’s driver and supply ecosystem, according to an internal company communication seen by CNBC-TV18. The riding-hailing company’s CEO Bhavish Agarwal, in the internal letter, cited synergies between the two verticals and improvement in driver utilisation.

Agarwal recently said that Ola has seen a recovery in the ride-hailing business to pre-COVID-19 levels.

The company has been entering new verticals as it recently launched Ola Cars as a marketplace for new and used cars. The Bengaluru-based firm is also looking at scaling the reach of the platform Ola Cars to 100 cities by the next year.

Ola Cars offers a bouquet of services to customers, beginning with purchase, vehicle finance, and insurance, registration, maintenance, including vehicle health diagnostics and service, accessories, and also resale of the vehicle back to Ola Cars, according to the company’s statement.

Ola’s core ride-hailing unit is also planning to list on stock exchanges soon, for which it raised $500 million from Warburg Pincus and Temasek, giving early backers Tiger and Matrix a part exit from their stake in the company. While the company has hired bankers for its IPO, it hasn’t disclosed by when it plans to go public.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Grocery delivery lessons that Swiggy learnt, and why Zomato failed

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Two months after announcing that it was launching grocery delivery for the second time, Zomato has shelved the plans and will stop the service from Friday, September 17. Zomato had briefly run grocery services last year as well, at the beginning of the COVID-19 pandemic, when food deliveries had fallen.

The company has been operating the 45-minute grocery delivery business on a marketplace model, letting customers order from neighbourhood stores.
But in a letter to grocery partners recently, Zomato acknowledged poor customer experience and “gaps” in the marketplace model, stating that “store catalogues are very dynamic, and inventory levels change frequently.”

The marketplace model depends on prompt response from partners such as kiranas, supermarkets and other grocery partners for the order fulfilment.

In fact, rival Swiggy had also launched a marketplace-based grocery delivery pilot in some cities such as Bengaluru two years ago, under the ‘Swiggy Stores’ vertical. However, they too had to pull the plug on the service due to below-par customer experience.

“The marketplace model relies on partners such as kiranas and supermarkets to continuously update their inventory database, to ensure that the products being ordered by the customers are available at the time. Swiggy had found that it was lacking in several partners and hence decided to stop the pilot,” a person aware of the developments told CNBC-TV18.

Also Read: Why Zomato chose to exit the online grocery business

However, just a year later, in 2020, Swiggy launched Instamart on a new model – dark stores.

Dark stores are local fulfilment centres distributed densely in cities for fast delivery. These could either be warehouses or even local retail stores where FMCG products and fresh produce are stocked.

Grocery delivery is a tricky, low-margin business and the model that seems to be working out for several companies is the dark store format, which is being followed by the likes of Swiggy for its Instamart business, Dunzo, and Grofers.

Swiggy, as per sources, has expanded its Instamart service to over 10 cities now, including the leading metros, where it now offers grocery delivery between 15-30 minutes.

“Swiggy learnt from its first pilot on what not to do in grocery delivery and launched Instamart last year on the dark store model which offers more control and better customer experience,” the person cited above added.

Swiggy did not offer a comment.

For food delivery companies, the presence of a large number of feet on street also works well for grocery. As per industry members, the timings of people ordering groceries and ordering food do not usually coincide, thus letting these companies utilise their manpower effectively, while also giving more earnings to the delivery partners.

Competition

Grofers has also been aggressively marketing its 10-minute grocery delivery service, and founder Alibnder Dhindsa last month stated that they have 60+ stores in Delhi and 20+ stores in Gurgaon to facilitate the express deliveries.

Zomato is now betting on Grofers, in which it made a $100 million investment earlier this year for a 10 percent stake, and sources say there could be a move to make a significant acquisition in the future.

“Grofers has found high quality product market fit in 10-minute grocery and we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort,” the company said in a statement.

Hyperlocal delivery platform Dunzo also entered into online grocery space, with its offering Dunzo Daily in Bengaluru, through which it will deliver essentials in 19 minutes.

Dunzo is using a network of mini-warehouses across neighbourhoods to offer the quick deliveries.

Other models

Another model for grocery delivery is where a few players have tied up with large retailers to fulfil orders for them.

Bengaluru-based Goodbox says it has been working with several large independent grocers in Bengaluru for 2-hour deliveries, and also has 15 stores currently on a 30-minute delivery pilot.

“We are working with supermarkets only and not kiranas since the former are better inventorised and also get higher average order value of around Rs 1000 compared to Rs 150 that kiranas get,” said Abey Zachariah, cofounder and CEO of Goodbox.

“Retailers understand customer choices well, and we help with the technology to connect customers,” he said.

“We have been able to break-even across most stores,” said Zachariah.

According to Redseer, quick commerce is estimated to touch $0.3 billion in CY2021 and is expected to grow 10-15x in the next 5 years, to become $5 billion by 2025. ​

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zomato to stop grocery delivery service from September 17

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Foodtech company Zomato has decided to stop its grocery delivery service from September 17 due to gaps in order fulfillment, leading to poor customer experience. The company said that it believes that its investment in Grofers will generate better outcomes for its shareholders than in-house grocery efforts.

In an email to its grocery partners on September 11, Zomato said, “At Zomato, we believe in delivering best in class services to our customers and largest growth opportunities to our merchant partners. We don’t believe that the current model is the best way to deliver these to our customers and merchant partners. Hence, we intend to stop our pilot grocery delivery service effective September 17, 2021”. The email mentioned that “store catalogues are very dynamic and inventory levels change frequently. This has led to gaps in order fulfillment, leading to the poor customer experience”.

When contacted, a Zomato spokesperson said, “We have decided to shut down our grocery pilot and as of now, have no plans to run any other form of grocery delivery on our platform. Grofers has found high-quality product-market fit in 10-minute grocery and we believe our investment in the company will generate better outcomes for our shareholders than our in-house grocery effort.”

Earlier Zomato had said that it had invested US $100 million (around Rs 745 crore) for acquiring a minority stake in grocery delivery platform Grofers. In July Zomato CFO Akshant Goyal had said , “It (grocery) is a large opportunity. The online grocery is nascent right now but is growing rapidly not just in India but across the world…”

Zomato had launched the pilot grocery delivery service in July in select markets offering grocery delivery within 45 minutes to its customers.

With inputs from PTI

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Grofers set for 10-minute grocery delivery in 10 cities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Online grocery delivery platform Grofers is looking to reduce the delivery time from 15 minutes to below 10 minutes for every customer in India.

“Today, we launched our 10th city with the promise to deliver groceries within minutes to your doorstep. While our average delivery times are still hovering around the 15 minute mark, our eventual vision is to be below 10 minutes for every customer in India,” Albinder Dhindsa, co-founder and the chief executive officer said in a blog on August 17.

He added that the firm, which recently turned into a unicorn, has a goal to bring the delivery time to below 10 mins for the majority of customers within the next 45 days.

Grofers’ services are available in Delhi, Gurugram, Mumbai, Bangalore, Hyderabad, Kolkata, Jaipur, Ghaziabad, Noida and Lucknow.

Dhindsa’s blog comes days after the Competition Commission approved Zomato’s proposed purchase of a 9.3 percent stake in Grofers India on August 13. Zomato, last month, said it has invested $100 million (around Rs 745 crore) for acquiring a minority stake in the grocery delivery platform as the company looks to have more exposure to the online grocery segment.

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The recently-listed Zomato will acquire a 9.3 percent stake in Grofers India Pvt Ltd and Hands on Trades Pvt Ltd (HoT). Grofers International Pte is the holding company of Grofers India and HoT.

The deal would bring back grocery ordering on Zomato after close to a year.

Zomato CFO Akshant Goyal had in July said, “It (grocery) is a large opportunity. Online grocery is nascent right now but is growing rapidly not just in India but across the world… We are actively experimenting in that space and recently invested USD 100 million for a minority stake in Grofers, with the idea of getting more exposure to that space and building our strategies and plan around that business.”

(With agency inputs)

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Coronavirus impact: Swiggy enables grocery deliveries in over 125 cities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Food delivery platform Swiggy on Monday said it has expanded delivery of groceries and household essential services to over 125 cities in the country.

Available on the Swiggy app under the ‘Grocery’ tab, the company is enabling on-demand procurement and delivery of essentials to the customer’s doorstep and the service is being fulfilled through neighbourhood stores and distribution centres of large brands.

“Extending our hyperlocal delivery offering will unlock a new dimension of convenience and safety for our consumers as well as earnings for our Delivery Partners during these extraordinary times.

“As we continue to scale this category, our goal is to provide the necessary support in terms of access to essentials and encourage citizens to stay at home during the lockdown period”, Vivek Sunder, COO Swiggy said in a statement.

Through the ‘Grocery’ category, consumers can directly view available stores in their locality, add items to their cart for payment and opt for ‘no-contact’ delivery on prepaid orders.

Swiggy has partnered with several national brands and retailers such as HUL, P&G, Godrej, Dabur, Marico, Vishal Mega Mart, Adani Wilmers, Cipla and other city-specific stores to supply branded essential products and food items.

Additionally, Swiggy has revamped its offering ‘Swiggy Go’ by launching a hyperlocal delivery service ‘Genie’ in over 15 cities.

‘Genie’, as the name suggests, opens up the platform for pick up and drop of items from anywhere within the city. This includes instant pickup and drop service to send packages across the city or purchase essentials from a particular store.

Swiggy has also introduced ‘Swiggy Hunger Savior Covid Relief Fund’ with contributions from Swiggy leaders, employees and investors, along with launching the ‘Hope, not Hunger’ initiative to feed thousands of underprivileged, daily wagers and stranded migrant labourers during the lockdown.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow