NEW DELHI: Walmart’s Flipkart, Swiggy and IPO-bound Zepto have stopped promoting their grocery businesses as “10-minute” delivery services following an order by the Indian government that was spurred by concerns over road safety.
The move is a major setback for the quick commerce sector which has become a US$11.5 billion market in India within five years and changed how Indians shop, with apps allowing groceries and electronics to be delivered within minutes.
Still, rash driving by riders and low pay have dogged the sector, a darling of foreign investors, prompting the labour ministry to ask some companies during a private meeting on Saturday (Jan 10) to stop using the “10-minute” branding. It was not clear if there would be any penalties for non-compliance.
Eternal’s Blinkit changed its branding on Tuesday, and Zepto, Swiggy, and Walmart’s Flipkart have followed suit to drop the fast delivery promotion, their apps showed on Wednesday.
Eternal has said there was no change in the business model for its quick commerce platform, Blinkit. Zepto declined to comment, while Flipkart and Swiggy did not respond to Reuters’ queries.
FAST DELIVERY PLEDGE REMOVED, BUT PRACTICE MAY REMAIN
India’s quick-commerce companies deliver products from over 2,000 neighbourhood warehouses.
Despite the government’s request, the companies can still offer the popular fast delivery services.
In at least one area of Delhi, the Blinkit app showed delivery within eight minutes on Wednesday.
“The removal of the 10-minute delivery catchline is largely optics-driven rather than business-altering,” said Karan Taurani, executive vice president at securities firm Elara Capital.
Swiggy in December raised $1.11 billion from institutional investors, including BlackRock, Temasek and Fidelity, saying previously the proceeds would bolster cash reserves and fund “new experiments” in quick commerce and food delivery.
Swiggy and Eternal also have thriving food delivery businesses, which are not operated on fast-delivery promises.
https://www.channelnewsasia.com/asia/indian-government-order-prompts-walmarts-flipkart-swiggy-drop-10-minute-delivery-claim-5860621
