Search, compare and click buy. Sounds familiar? The retail landscape in India has evolved faster than consumers’ imagination. The latest chapter in evolution of trade is the emergence of 10-minute grocery deliver, quick commerce (Q-commerce). Consumers can now order everyday things without bothering about minimum order value. The Covid-19 pandemic has made life tough for everyone but, in all this chaos, e-commerce has grown manifold. Companies have built reputation around money back guarantee.
Comic and Tragic Capitalism
Have you ever wondered, who is paying for your 10-minute grocery delivery? Earlier, minimum order value helped retailers to offset delivery and packaging charges. Q-commerce is burning cash at an unprecedented rate. And, all this cash is being pumped by deep pocketed venture capitalists (VC). Business growth is achieved by staying ahead of the curve. Q-commerce cost structure involves payment to wholesaler, provision for wastage in perishable goods, payment processing, packaging cost, delivery and warehouse charges. When the average order value goes down, the quick delivery service provider is hoping that volumes will become its saviour. When volumes are low, operations are curtailed in certain areas. Eventually, the 10-minute grocery delivery promise loses its sparkle.
Instant shipping encourages consumers to make multiple small purchases. The notion of ‘who spends wins’ is making businesses unsustainable. VCs love rocket ship growth. When billions of dollars in VC funding goes down the drown, the whole exercise becomes tragic. E-commerce companies have the cash needed to reduce emissions. Sadly, they will spend on environment in the coming years, but before abusing it more than ever before.
Technology: The Enabler
Every start-up that uses computer software and hardware is not a tech company. Creating technology and using technology as an enabler are two completely different things. When an e-commerce company sells grocery online it is a retailer. Just because it sells products through an app and website it doesn’t become a tech company. Software companies have the advantage of a continuously decreasing marginal cost, while the economies of scale in grocery business plateaus after a point. When losses erode net worth of any company, it has to go through liquidation. And, this is bad news for all stakeholders.
Q-commerce and Environment
Mindless capitalism has done irreversible damage to nature and 10-minute grocery delivery is adamant to continue the trend. When a delivery agent makes multiple trips to the same locality several times a day, capitalism is incentivising carelessness. On some occasions they visit the same household multiple times a day. In the morning delivery agent brought fruits and vegetables, while in the evening it knocked on the door with toothpaste and oats. Consumers have stopped making monthly or weekly lists and order stuff online when necessary. There are some benefits of getting grocery delivered within minutes, but all this convenience comes at a huge cost.
Our planet is choking and extreme weather conditions have become more frequent and severe. Some of you may wonder, ‘does the climate gets adversely affected if I order chips and beverages through 10-minute delivery?’ You are not the only person doing it. That’s exactly the point. Every day more people are ordering stuff online. Next day delivery or same day delivery or 10-minute delivery are all part of the problem. When e-commerce was blossoming, it was widely believed that economies of scale would help to streamline the retail industry. Initially, it did manage to deliver promised results, but the pursuit to reduce delivery time has erased accumulated merits.
When a retailer promises to deliver groceries with in ten minutes, it has to engage hundreds of agents in a small radius. These delivery agents get on their bikes or scooters and make a dash to consumer’s doorstep. E-commerce giants and unicorns have pledged to reduce their carbon footprint. They have started to commission electric vehicles in their fleet, but the timelines set by them to reduce and offset emissions is not in sync with their commitment.
Great Power and Responsibility
Companies have huge volume of data about consumer behaviour. They also keep a record of emission. Occasionally, companies analyse the impact of operations on environment, but fail to implement change in their behaviour. Small companies are not going to be the first to adopt environment friendly practices. Large e-commerce companies have to set an example and set rules for third-party operators.
Companies like Amazon and Walmart owned Flipkart have the financial resources to make their fleet of trucks and motorcycles green. In a highly competitive market, no one wants to surrender the cost advantage, but companies have to think beyond the bottom-line if they wish to become an agent of change. The government will be labelled as high-handed if it tries to dictate terms.
Discount and Activism
Companies listen to their consumers more than anyone else. Put together, investors, employees and government don’t even come close. Investors are concerned about numbers, while employees fear unfair treatment and victimisation, in case they decide to find flaw in company’s practices. All across the world, government view can be swayed by lobbying or making generous donations to ruling party’s fund and India is no different. Consumer activism can force companies to redesign and reengineer operations. All this is possible without suffocating innovation.
We don’t have be the victim of a severe climate event to understand how our own behaviour is making life difficult. When floods in Chennai overwhelm the city’s drainage system or when drought in Maharashtra destroy crops, there is no time to deflect responsibility. Q-commerce is not the only reason for climate change, but it is one among many. A problem can be solved if we decide to evaluate alternative course of action and allocate sufficient resources for remedy. Allowing business-as-usual emissions is all talk and no action.