As per Ashneer Grover, the former managing director and co-founder of fintech platform BharatPe, 10-minute delivery model, or the entire domain of quick commerce, possesses no unit economics. In a recent post on Twitter, the entrepreneur, who after his ouster from BharatPe founded his new company, Third Unicorn, wrote: “BlinkIt / Zepto - problem is not ₹15 for delivery against ₹50. Problem is 10Min delivery has no economics - low ticket size and low margin can never be solved through forced low delivery cost. BlinkIt journey : 90 Min (bull run) —> Next day (bear run) —> 10 Min (bull run) —> ??”
He is referring to the on-going strike of the Blinkit workers. For the unversed, the delivery personnel went on a strike last week after the Zomato-owned company brought down their fees paid to the riders to Rs 14 from Rs 50 earlier. This caused a chaos across Delhi-NCR and Gurugram and also resulted in services of the company taking a hit. These developments have come against the backdrop of several investors placing an increased focus on profitability and other financial metrics. As a result, several companies which have come under the scanner for not being profitable are slashing pays, incentives, laying off employees and taking measures to cut down their expenses. In an interview with Business Today recently, Aadit Palicha, the CEO of the quick commerce company Zepto, said that the firm can hit the profitability benchmark by next year. He addressed the criticism surrounding the 10-minute delivery business model and said, “We don’t just have stores, we have cash deposits…Frankly we don’t see any number that points to an unviable business model. ”