Higher costs and elusive profits: Why quick deliveries in India may go slow

The promise of quick delivery by companies like Zepto, Blinkit and Dunzo is likely to fade as profits prove elusive. According to a report by Financial Express (FE), lately, these companies have increased the minimum order requirements for free delivery and increased the charges to make the business more lucrative. 

 

Dunzo and Zepto are now charging Rs 3-7 per order and have increased the threshold for free orders from Rs 149 to Rs 249. 

 

A report from Entracker recently said that Dunzo Daily is losing Rs 230 per order. 

 

"The business models need to be tweaked to include a reset of delivery time expectations. Therefore, we expect the players to settle for slightly higher delivery time in the future for most orders, around 40-60 minutes," Naveen Malpani, partner at Grant Thornton Bharat, told FE. 

 

A founder of a quick service company reportedly said that the 10-minute delivery was something of a "gimmick" as the speed of the delivery has slowed down and the costs have risen. 

 

"There is a lot more sobriety in quick commerce now and from now on, no specific delivery time will be mentioned. Companies will instead promise quick delivery," he said. 

 

"About 40 per cent of our customers are now opting for slower deliveries since they get an additional discount on that," he added. 

 

Among the solutions, a CEO said that the companies might start charging Rs 15-20 per delivery. Also, customers are opting for slower deliveries and paying less.

 

Swapnil Potdukhe, AVP of JM Financial Institutional, told FE that, on average, orders take about 15-20 minutes and customers are satisfied.