'In the gig world, logistics is huge...': Deepak Shenoy reacts to Zepto CEO's comments on Indian startups

Hours after Zepto CEO Aadit Palicha reacted to Piyush Goyal’s “Startup Reality Check”, Capitalmind CEO Deepak Shenoy said Startups like Zomato, Swiggy, Zepto, Flipkart, and Ola have stepped in making logistics accessible, cheap and reliable.

In a post on social media platform X, Shenoy noted startups like Zomato, Swiggy, Zepto, Flipkart, and Ola have stepped in to:
> Cut delivery costs
> Speed up delivery times
> Expand reach across cities
> Help gig workers earn while staying independent
> Make home delivery easier for everyone
> Create job opportunities, including for women

Shenoy further noted these companies use clever systems to solve problems that the country has failed to fix—like bad infrastructure and restrictive labor laws. While their high valuations may be questionable, the services they offer are valuable.

For India to become a global tech and manufacturing leader, it first needs better roads, reliable logistics, and respect for workers. Until then, these startups are building the foundation, he noted.

"In the gig world, logistics, esp last mile, is a huge huge requirement. It's true in the US too. Indian logistics suck. We have horrible delays in trains. Air logistics is expensive. Even speed post measures time in days (forget hours or like zepto does, in minutes). India has the highest cost logistics among peers - upto 14% - which sucks. Zomato, Swiggy Zepto, Flipkart, Ola etc are startups that focused on building systems... I will probably forever crib about their valuations. But these companies provide valuable services using a mechanism where the country, collectively, has failed us 
- by using gig workers to get out of really shitty labour laws, 
by optimising delivery in cities where you dont have reliable roads, power or people, 
by creating a middle class that can delivery things and become consumers," Shenoy noted in his post.

This came after Union Minister of Commerce, Piyush Goyal highlighted that Indian startups should do more in the field of deep tech innovation and impactful industries. He noted the the disparities between India and China in the innovation sector, stating that while India was focused on perpetuating global trade stereotypes and relying on cheap labor, China was making strides in artificial intelligence and electric vehicles.

In response to his comments, Zepto CEO Aadit Palicha vouched for the resilience of India's consumer internet startups amidst criticism, especially when compared to the technical advancements seen in the US and China. 

He emphasized Zepto's significant impact, highlighting how the company contributes to the livelihoods of nearly 1.5 lakh individuals, generates over Rs 1,000 crore in taxes annually, attracts over a billion dollars in FDI, and invests hundreds of crores in bolstering India's supply chains, particularly for fresh produce. 

Palicha suggested that such achievements demonstrate a remarkable feat in Indian innovation, showcasing the value and potential of the country's entrepreneurial landscape.

Palicha said: “It is easy to criticise consumer internet startups in India, especially when you compare them to the deep technical excellence being built in US/China.”

Palicha emphasized that India lacks a prominent foundational AI model due to the absence of successful internet companies in the country. He urged the startup ecosystem, government, and major Indian investors to actively promote the development of local champions in this field, rather than hindering the progress of teams striving to achieve this goal.

Former Infosys CFO Mohandas Pai also disagreed with Goyal's comments, stating that he should refrain from belittling India's startups. He questioned Goyal's support for deep-tech startups in India and argued that comparisons with Chinese startups are unjustified, as India also has strong players in these sectors, albeit smaller. Pai highlighted the significant disparity in investment between China and India, urging Goyal and Ashwini Vaishnaw to address this issue.

“China invested $845 billion from 2014–2024; India only $160 billion! Why is Minister @PiyushGoyal @AshwiniVaishnaw not helping solve these issues?” he asked.