E-commerce companies in India are rapidly increasing their delivery staff numbers out of concern that they may suffer during one of the busiest shopping seasons of the year, which starts in earnest next month.
The decisions were made as the job market became tighter – India’s unemployment rate fell below 7% in July for the first time since January – and inflation remained high, which complicated the outlook for the sector, which has long struggled with chronically high employee turnover.
TK Balakumar, chief operating officer at online grocery seller BigBasket, told Reuters, “Overall demand for the gig workforce has seen a sharp increase and that is not completely supported by the increase in pool size of delivery people… It is not a free flowing pool.”
The company, sponsored by the Tata group conglomerate, increased the number of delivery partners in its instant delivery section BB Now from 500 in the March quarter to 2,200 in the quarter that ended in June. By March 2023, it hopes to increase that number even more, to roughly 6,000.
BigBasket and other e-commerce companies, like Dunzo, employ their own delivery staff, but others, like cosmetics-to-fashion retailer Nykaa, rely on outside vendors.
According to a report released in June by think tank NITI Aayog, the number of people employed in gig work—of which delivery workers and salesmen make up a sizable portion—is predicted to increase to 9.9 million in India in 2022–23, an increase of roughly 45% from 2019–20.
Sekhar Garisa, strategy chief at business services provider Quess Corp., stated that “People… look at a delivery job as a job in transit, they move off to something else, you’ll always have shortages and then in cases where there is a specific event or festival, there’s definitely a challenge that the delivery requirement goes up.”
Companies like Quess and TeamLease function as middlemen between e-commerce businesses and job seekers in Tier 2 and Tier 3 cities across the nation.
Some companies were hopeful that the labour shortage scenario would improve.
“There’s a constant churn and movement that has existed for 4-5 years. It can cause a temporary crunch but we don’t think it is a long term thing because supply and demand will match,” Reuters was told by Kabeer Biswas, the CEO of Dunzo.
Dunzo presently has 75,000 delivery partners and is supported by Reliance, a company owned by Indian billionaire Mukesh Ambani.