Startups eye delivery space: Young firms like Delyver, Grofers deliver a whole range of services

A customer can log on to their respective smartphone app or website to place orders from listed local stores and restaurants

For couch potatoes there is now hope. Big cities in India are increasingly witnessing the emergence of a new bunch of startups eager to deliver a whole range of services to people at their door step. On-demand delivery companies are picking up groceries, cakes, flowers, meals and even trucks from local neighbourhood stores and suppliers on their behalf.

Startups like Bangalore's Delyver and Gurgaon's Grofers deliver groceries and meals. Scootsie (formerly known as Meals on Wheels) in Mumbai specialises only in restaurant deliveries for now but are keen to expand into hypermarts. Blowhorn, also known as Uber for trucks, arranges mini-trucks for relocation in Bangalore in a span of few hours.

These companies have tied up with hypermarkets, meat shops, flower shops, restaurants for deliveries. A customer can log on to their respective smartphone app or website to place orders from listed local stores and restaurants.

"We are focusing on neighbourhood commerce. More and more people are relying on services like ours. They don't want to do those mundane purchases like vegetables, meat and so on. They know the store well but want to avoid standing in queue," said Delyver co-founder Afsal Salu.

He found resonance in Blowhorn, which supplies trucks ondemand at a cost that includes the driver and fuel cost. "People don't mind paying, people understand the value of saving time. Rather than worrying over the weekend about getting a bed shifted they would rather spend it doing something else," said Blowhorn's cofounder Mithun Srivatsa.

Grofers and Delyver are lastmile solution models, which have picked up attention primarily because of pull-based requirement that the industry is shifting to, according to Manish Saigal, MD at specialised advisory firm Alvarez & Marsal.

Currently 99% of India's retail market is offline, according to a report by Technopak Advisors, giving a huge opportunity for delivery companies.

But it is not just consumers who are driving the on-demand services but also local stores, who risk losing out to e-commerce sites like localbanya.com and bigbasket. com. Local deliveries, not just by kirana stores but also restaurants, is largely unorganised and lack the convenience and speed of a technology-driven operation.

"Technology will continue to change the way Indian consumers buy goods by providing them better convenience, selection and pricing. The recent e-commerce boom is just the first step. Companies like Grofers help consumers get products within hours instead of days by using mobile technology to connect them with the best local businesses around them," said Abheek Anand, principal, Sequoia Capital, which invested in Grofers recently.

Grofers co-founder Albinder Dhindsa said that almost all the investment coming into the company was getting deployed in bettering technology. "The lifecycle of every delivery, right from generation to reaching the customer, is tracked without any physical intervention. The winner in the on-demand logistics space will be the one that is able to figure out the technology piece best," said Dhindsa, who was earlier heading Zomato's international operations.

More companies are looking to get into this space sensing opportunity and fewer players. Ondemand delivery companies like Instacart and Doordash have made it big in United States. According to Unitus Seed Fund's partner Srikrishna Ramamoorthy many startups in the on-demand delivery space have reached out to him for funding in the last six months. Unitus recently funded Blowhorn.

However, Prahlad Tanwar, director for transport and logistics at KPMG, is cautious regarding the scaling up potential of these ondemand companies, saying that these startups are operationally intensive activities and there are low-entry barriers to the market.