Singhal says it is also not clear what problem they are solving, as most groceries already take orders through WhatsApp and deliver to customers’ homes. That said, the global mix of surrounding capital is the only explanation for gaining investment opportunities in an age of low interest rates. “For me, this stimulus is due to this uncontrolled pressure of money, which is forcing these entrepreneurs to ignore economic understanding,” he says.
Anand Ramanathan, a partner at Deloitte India, says there are few indications that the money taps will close soon. According to the World Economic Forum, investors have been throwing money at Indian startups for at least a decade, scrambling to gain a foothold in a nation whose overall consumer markets could reach $ 6 trillion by 2030. “Does any of these models make money? Is it sustainable? They are not even close, “he says. “It’s all just a customer acquisition game.”
India has facilities that can make it more suitable for fast trade than western countries. Palicha of Zepto says Indians buy groceries more often than buyers in the developed world and its crowded cities make it possible to reach a large number of customers from a single dark store. “This model thrives on density,” he says.
There is evidence that in parts of India’s largest cities, groceries are beginning to feel the pinch. In a residential neighborhood on the border of the HSR layout – an up-and-coming suburb south of Bangalore that has emerged as a major startup hub – shoppers were unanimous that online shopping was reducing their profits. Ashraf Punchihar says his shop business has shrunk by 20% in the last six months. “Day by day, new companies are coming online,” he says. “You can’t compete with them.”
While it is unlikely that the rays could cause widespread death anytime soon, local dispersal is a possibility. Aaron Shapiro, an anthropologist at the University of North Carolina at Chapel Hill, says it could lead to a process known as “infrastructural exclusion.” In the west, the shift from neighborhood stores to large supermarkets has abandoned what companies thought of as “impractical markets” in poorer areas, leading to a “food desert” where residents have limited access to healthy, affordable groceries. In India, this phenomenon can take on a unique flavor. Mohammad Riaz, a regular grocery customer in Chamrajpet, says the store was a lifeline for less tech-savvy customers during the lockdown. “These are not educated people – they don’t know how to place orders [online]”He says.
Another concern is the impact on delivery drivers. More than 80% of India’s economy is informal, meaning workers have no official employment contract and are not protected by employment laws. So for many Indians, gig work is clearly no different from their options. But unpaid wages due to scattered work and incentive-based earnings still plague many gig workers, says Aditi Suri, a sociologist at the Indian Institute for Human Settlements (IIHS). “It really makes people feel this inner uncertainty,” she says. “You have no way of really calculating what’s going to happen to your salary next month.”
The Dunzo delivery driver, who did not want to be named, said he did not mind working and that he regularly pulled 12-hour shifts. But if he achieves the incentive target of 21 orders a day, which increases his salary by about 50%, then he is really fit for his time. “It’s useless if I don’t get any incentives,” he says. “All my efforts were in vain.” It typically hits a target of eight to 10 days per month.
Why, if India already has a hyperlocal retail network fully tuned to the needs of each community, should anyone spend money to build a new one? The hosts of “Kirana Tech” startups have decided that there is no need for it. Instead, they are building tools to help shops compete with the behemoths of modern retail. “We see a network of grocery stores in this country as a national infrastructure that is comparable to a power grid or railroad,” says Prem Kumar, CEO of digital technology company Snapbiz.