“There has been a 30% increase in demand for delivery executives and dark store executives (those who work in warehouses) over the last two months,” said Kartik Narayan, chief executive officer for staffing at TeamLease Services, referring to the demand from quick commerce companies.
Every year, summer and the accompanying holiday season are among the peak times for this business, but the crunch for delivery partners is significantly tighter this time.
The sharp rise in demand is forcing quick commerce companies to poach these executives from one another, signalling a likely rise in the executives’ wages. Gig workers are getting poached by staffing firms, and larger companies are in turn hunting them out to bring them onto their payrolls. All this is resulting in high attrition.
Staffing industry experts such as Manu Saigal, director, general staffing, at recruitment firm Adecco India, said the demand for these executives will rise over the next few months as the churn is expected to increase.
According to TeamLease Services , quick commerce employs 200,000-250,000 employees in the form of gig workers, those who are with staffing firms, and those who are permanently employed by the companies.
Why is this happening?
Quick commerce caters to delivery of items in less than 15 mins through a concentrated network of dark stores, which serve as warehouses in high-order neighborhoods.
The hyper-competitive space has multiplied in recent months with new players such as Amazon, Flipkart and BigBasket joining the fray with incumbents Swiggy’s Instamart, Zepto, and Zomato-backed Blinkit.
As quick commerce gains traction, these companies are spreading their wings to faraway places, seeding demand for people to manage their warehouses and deliver the goods to consumers’ doors.
“About two-third of our hires for delivery executives is taking place in tier-II and tier-III cities,” said Lohit Bhatia, president of workforce management at business services provider Quess Corp. “Summer months, which bring in the school holidays, have seen a 25% uptick in delivery hires.”
While Flipkart and Zomato declined to comment on the hiring spike, BigBasket, Swiggy, Amazon, Uber and Zepto did not respond to requests for a comment.
The quick commerce business has practically surged in recent times, which explains the interest from new entrants. Average order values have sharply increased in recent months.
According to a report by Redseer Strategy Consultants that was released last week, the quick commerce market grew by 70-75% last year, which was five times the e-commerce growth.
With a $2.8 billion current market size, Redseer said average order values for quick commerce platforms saw over 15% increase in FY24 driven by category diversification and greater spending by users. Average order value excluding delivery fee but post discount expanded to ₹480 in 2023 from ₹376 in 2022, according to the consultancy firm.
The order values are expected to continue to rise as the companies, who were initially focused on groceries, are now expanding to also offer home improvement products, electronics, beauty products, even toys.
Most recently, Tata-backed Bigbasket outlined plans to sell electronics and appliances through its association with sister company Croma.
Then, Flipkart has been making gradual attempts to relaunch its quick commerce vehicle as a part of its larger ambitions to sell everything and stay relevant. Its earlier brushes with the fast-paced delivery system—with Nearby in 2015 and Flipkart Quick in 2020—had to be shut down for various reasons.
Your employee, my employee
The rush for executives is resulting in rampant poaching. Recruiters told Mint that executives who joined as gig workers are getting hired by staffing firms to work for clients while being on the payrolls of the HR firms.
But quick commerce companies also want their executives as employees and try to get experienced delivery and dark-store agents on their own payroll. As a result, attrition can exceed 20% for non-gig workers, staffing firms said.
Higher salaries on the horizon
While gig workers are paid per parcel/trip made, a delivery agent on the payrolls of a recruitment firm or quick commerce company can earn ₹18,000-25,000 a month.
“The incentives will kick in during the festive season (August-September onwards), but right now companies are trying to engage them by talking about the benefits, provident fund details, if the agents move from gig to a more permanent role,” said Saigal of Adecco India.
“While this is not the first time this is happening, there will be an increase in the salaries owing to limited supply of workers,” said Satish Meena, an advisor at consumer data analytics firm Datum Intell. “With newer players like Uber, Flipkart and Amazon coming in, it’s going to be an even more competitive space in terms of delivery personnel and fleet operations.”
He added that the only good thing is that not much training is involved in this sector. “So, companies will see some constraints for some time in terms of labour, but it will eventually ease out and they will be able to onboard workers to fulfil demand.”
Separately, Swiggy has teamed up with leading staff hiring experts such as Apna, WorkIndia, Kaam, and Shiftz to help restaurants connect with qualified candidates across various roles, including cooks/chefs, kitchen helpers, and service and cleaning staff.
“We understand that right staffing and attrition are big challenges for our partners. The Staffing Support initiative reflects our commitment to provide comprehensive solutions for their operational challenges,” Deepak Maloo, AVP of supply at Swiggy said in a press statement. “By partnering with leading staffing vendors, we aim to simplify hiring, reduce costs, and help our partners focus on delivering great customer experience.”