Why quick deliveries are getting slower; MeitY proposes changes to IT rules

By Daisy On Jun 7, 2022

Quick delivery firms were all the rage in 2021, when liquidity abounded and tech valuations hit record highs. In 2022, though, these companies have found funding and delivery workers hard to come by, causing them to calibrate their high-burn business models. For the customer, that means 10-minute deliveries often take a lot longer these days.

Also in this letter:
■ MeitY republishes proposed changes to IT rules
■ Zomato board likely to meet June 17 to clear Blinkit deal
■ Caste discrimination rampant in global tech, activists say

Startups recalibrate approach to 10-min deliveries

It took Blinkit just a few months to shift from its 10-minute delivery credo to “grocery delivery in minutes”. In fact, February was the last time you saw Blinkit (formerly Grofers) promoting 10-minute delivery on social media.

The Zomato-backed quick commerce company rebranded itself from Grofers last December and aggressively advertised its pivot to the red-hot ultrafast delivery segment.

Test drive: We attempted to order multiple times on Blinkit and competitor Zepto, which started operations in April 2021, but it took more than 10 minutes and sometimes half an hour to get the deliveries.

On at least two instances in Mumbai and in Pune, Blinkit delivered the next day.

Marketing gimmick? After a rapid, capital-fuelled rise, the buzzy quick delivery sector in India is turning out to be what many experts feared: a marketing gimmick.

As it has grown, Zepto has seen its median delivery times increase from eight minutes in October 2021 to 9-10 minutes, according to a person in the know. This person added that the company has no plans to change its 10-minute delivery promise.

Swiggy, which is betting big on Instamart, has stopped highlighting delivery timing altogether. In January, the platform changed its tagline from “groceries in 15-30 minutes” to “groceries in minutes”.

Challenges: We reported on May 11 that food and grocery delivery companies were facing an acute shortage of delivery workers, leading to longer wait times.

Other challenges quick-commerce firms face include rising fuel costs, high losses due to aggressive dark store expansion, operational challenges like surge times, and a lack of appetite from investors for cash-guzzling businesses.

MeitY releases proposed changes to IT rules that it yanked last week

The Ministry of Electronics and Information Technology (MeitY) has republished a draft of proposed changes to India’s technology and social media regulations with the aim of providing “a more effective grievance redressal,” and to plug “infirmities and gaps” in the rules.

Meity has sought comments from the public within 30 days from publishing of the draft and said that a formal public consultation on the subject would be arranged by mid-June.

“The IT Rules, 2021 provide for a robust grievance redressal mechanism. However, there have been many instances that grievance officers of intermediaries either do not address the grievances satisfactorily and/or fairly. In such a scenario, the need for an appellate forum has been proposed to protect the rights and interests of users,” the ministry said.

The revised notification, which comes days after a similar draft was published and taken down, will address challenges thrown up by the expanding digital ecosystem as well as gaps in the current regulations especially, “vis-a-vis Big Tech platform,” it said.

Few changes: In the draft published and then withdrawn Thursday, Meity had proposed the establishment of one or more grievance appellate committees for social media users. It noted that such oversight would provide an alternative to users who do not agree with the decisions of the in-house grievance officers of an internet intermediary. This clause remains unchanged in the latest notification released on Monday night.

The suggestion that the grievance appellate committee “endeavour to address the user’s appeal within a period of 30 days” also remains in the latest version.

However, Monday’s version grants intermediaries a safeguard. It says intermediaries may exercise “due diligence” to prevent misuse of their grievance redressal mechanism when any user submits “inappropriate, trivial or inauthentic complaint”.

Zomato board likely to meet June 17 to clear Blinkit deal

Zomato’s board is likely to meet on June 17 to clear a proposal to acquire quick-commerce startup Blinkit, almost two years after the two entities first discussed a potential deal, two people aware of the discussions told us.

The merger has been speculated on as an eventual outcome ever since Zomato first invested in Blinkit last year.

Details: Zomato will pay in its shares for Blinkit, formerly Grofers, the people said.

Blinkit’s shareholders are expected to get a little less than 10% in Zomato. Blinkit’s largest investor, SoftBank Vision Fund, will get an almost 4% stake in the foodtech company, one of the people said, adding that Blinkit’s investors may have to compulsorily hold Zomato’s shares for at least six month.

Based on Zomato’s closing stock price of Rs 69.85 on the BSE Monday, a 10% stake is worth about Rs 5,500 crore ($708 million).

Zomato already holds about 10% in Blinkit.

We had reported on March 15, citing sources, that the deal was expected to value Blinkit at around $700-800 million based on Zomato’s market capitalisation at that time. That was lower than Blinkit’s last valuation of a little over $1 billion.

Zomato is expected to issue one share for 10 Blinkit shares, we reported earlier.

Caste discrimination rampant in global tech, activists say

Google and its parent Alphabet recently landed in a controversy after they decided to cancel a caste-discrimination awareness initiative for employees. Now, some activists have told us this was not an isolated incident in the global tech ecosystem.

Employee support groups and labour unions also said caste-based discrimination among Indian workers in the US and Europe was rampant and need greater awareness and immediate policy action.

What’s happening? Anil Wagde, a member of the Ambedkar International Center, a US-based organisation which advocates for democracy in Indian society, told us he has “faced similar situations” in which US-based companies reached out for a caste awareness discussion but then cancelled the programmes.

“Content was vetted and approved but later they backed out after it was opposed by upper-caste employees, calling it divisive and a taboo subject,” Wagde said. He did not disclose the names of the companies involved.

A talk by anti-caste activist Thenmozhi Soundararajan, scheduled for Dalit History month in April under Google’s diversity, equity, inclusivity (DEI) programme, was cancelled, allegedly after some employee groups opposed it.

Google employee Tanuja Gupta, who was coordinating the DEI initiative, claimed she received warnings for violating company policies by campaigning in favour of the talk. Gupta quit after the incident, making her resignation public.

Google said it does not allow caste-based discrimination.

ETtech Done Deals

FlexiLoans, a digital lending platform for small businesses, has raised $90 million in a mix of equity and debt, the company said on Monday. FlexiLoans is backed by KKR India senior advisor Sanjay Nayar and former KPMG top honcho Narayan Sheshadri.

Ivy Homes, a prop-tech startup that uses artificial intelligence and machine learning to provide instant liquidity to sellers, has raised $5.75 million in equity and $1.3 million in debt in a seed round. The round saw participation from Khosla Ventures, Venture Highway, Y Combinator, GFC, Foundamental, Better Capital and Titan Capital.

Bombay Stock Exchange (BSE)-listed non-banking financing company (NBFC) Moneyboxx said it has raised Rs 21 crore by way of private placement from non-promoter investors. The fintech company said it plans to use the funds to expand the scale of its operations and tap growth.

Myntra bets big on live commerce for end-of-summer sale

Online fashion retailer Myntra will go big on live commerce during its end-of-summer event, called the End of Reason Sale, from June 11 to 16.

Great expectations: Sinha said the company expects to see five million customers transact during the six-day sale, with over one million of those expected to be new customers. About 40% of customers will be from tier-2 and tier-3 cities, she said.

Myntra expects a 26% jump in traffic for this year’s sale from last year’s, and a significant boost for its beauty and personal care business.

“This year’s EORS has come at an opportune time when customers are stepping out after almost two years. This has given a great impetus to fashion overall and we are hoping to see that momentum,” said Sinha.

Focus areas: In her first interview after taking over as CEO, Sinha told us on February 24 that personalisation, influencer-led live commerce, and beauty and personal care would be key focus areas for Myntra’s leadership team.