BANGALORE: Bangalore-based startup entrepreneur Arjun Zacharia was in for a surprise when he found out that his favourite pizza outlet in the Koramangala area couldn’t deliver his order.
At the outlet, he found out that the company didn’t have any delivery staff at work. He was told that everyone had left to join Flipkart, the country’s largest online retailer whose office was only a few hundred metres away.
Flush with cash from venture capital investors, Flipkart is scrambling to meet increasing demand from over 1.8 crore registered users. It has hired deliverymen from other companies, in many cases almost doubling their salaries.
The growing need for delivery staff is likely to put more pressure on restaurants like Domino’s and retailers that rely on home delivery for a large part of their business.
Of the 13,000 employees at Flipkart, 7000 are engaged in last-mile delivery. Of the 12,000 Flipkart plans to hire this year, nearly 3,000 will be for the delivery purpose.
“E-tailers are increasingly looking at delivery as a differentiator. To scale, you need seamless integration,” said Pragya Singh, associate vice-president for retail at advisory Technopak.
Flipkart, Amazon and other online retailers have launched same-day delivery in various cities recently.
Jubilant FoodWorks which operates the Domino’s pizza chain, said in an investor relations call last quarter that wage increases in certain states and network expansion resulted in growth of personnel expenses during the quarter.
A company representative said, however, the shortage of delivery staff has not had any significant impact.” We are not under any pressure in terms of demand for higher salaries.
Neither have we seen higher attrition,” said Harneet Singh Rajpal, vice-president of marketing at Domino’s Pizza India. He did not disclose attrition figures. “Major part of personnel cost is due to network expansion,” he added.
Domino’s employs more than 30,000 people in 750 stores across 152 cities. Of this, a majority of employees work in delivery. The pizza chain with nearly 70% marketshare in India also has its own online business which currently contributes 22% to the company’s total sales.
“Salaries of delivery staff have nearly doubled in the last two years. It used to be about Rs 4,000- 5,000 but is now close to Rs 9,000,” said Praful Thachery, the cofounder of Delyver Retail Network which offers hype-local delivery to retailers on their online platform.
Every day, it delivers nearly 500 orders to customers of restaurants like Mainland China and Noodle Bar. Delyver’s growth is partly due to the increasing cost of maintaining a captive delivery team. From three people in 2010, it has grown to over 100 staff.
Fortunately for these businesses, the shortage of last-mile delivery staff might not be long-lasting. “These aren’t very skilled jobs, so it’s easy to train more people into the workforce,” said Singh
Source : Times Of India