Shortage of delivery agents could trip e-commerce sales this festive season

Early this week online food delivery startup Swiggy had organised a two-day job fair in Bengaluru to hire delivery agents and beef up its operations ahead of the festive season. The company, which was hoping to hire 300 people, had only 168 walk-ins, out of which a lesser number would be selected.

Swiggy has to screen these candidates, who could potentially earn as much as Rs 25,000 per month, before taking them on board. It is not that Swiggy didn't publicise its recruitment drive, it is just that there were not enough candidates who were enticed by the offer to deliver food from restaurants to customers in Bengaluru's busy traffic.
 

The low turnout is also a proxy for the looming shortage of delivery agents for not just food startups, but also in India's e-commerce sector. E-commerce firms such as Amazon, Snapdeal and Flipkart are expanding warehouses, deepening their presence in smaller towns and committing to same-day delivery of goods.

Both Snapdeal and Flipkart, India's large e-commerce firms, have committed to hire 10,000 temporary workers each for managing demand during the festival season. Amazon works with vendors such as Quess Corp to manage local deliveries. By ensuring timely deliveries during the festive season, they are trying to earn customer loyalty rather than buying them as they did in the past few years by offering discounts.

India's retail industry sees more than half of its sales during the festive season, September to December, as consumers wait for marked-down prices to make large-ticket purchases.

Flipkart did not respond to an email seeking comments for this story. Snapdeal said it did not anticipate any issue in onboarding people. "We have created nearly 10,000 temporary jobs this year. The additional hands on deck this festive season will ensure that no deliveries are delayed due to manpower constraints," the company said in an email response.

Amazon said it had multiple staffing partners and had created thousands of opportunities for people across the country but did not quantify. "We remain committed to high customer engagement and experience and we will hire a mix of full-time and contractual employees to ensure our delivery promises are met," said the company in a statement.

Experts said there was a requirement of an additional 50,000 delivery agents, mostly placed in India's six large metros, this festive season to meet the spike in demand.

"There is a clear shortage. While we see a 15-20 per cent increase in demand, the shortage will be 10 per cent. Many retail players want to strengthen their offering. That is also affecting the demand for e-commerce players," said Guruprasad Srinivasan, President, people services and logistic business at Quess Corp Limited.

QuikrJobs, a listing platform for blue collar workers, claims they have seen 3 lakh people applying for the jobs of a delivery boy, driver and warehouse staff in last three months, while Baba Jobs, another jobs platform says that they currently have a million people using their portal to look for similar jobs.

Despite having a large number of job seekers, the reason for shortage of delivery personnel in the market is the high proportion of variable pay as compared to base pay.

India's norms on Foreign Direct Investment in online marketplaces effective April seems to have given a level playing field to large offline retailers. This has had an impact on e-commerce sales. RedSeer Consulting, which tracks e-commerce industry said on August 24 that India's e-commerce firms saw sales drop in the first six months - 19 per cent in January to March and a 5-10 per cent dip in April to June.

In anticipation of higher growth in the festive season, offline retailers such as Future Group are also beefing up their teams at their stores, taking away resources that e-commerce companies could have tapped into.

QuikrJobs says that there is at least 70-80 per cent increase in demand for delivery boys.

Amit Jain, head of QuikrJobs, says that "delivery boy jobs are like what BPO jobs were at a point of time - the ones in most demand" and points that e-commerce firms also require staff at warehouses.

Most e-commerce firms and their delivery arms need to do background checks of these agents, train them on soft skills; in handling credit card machines and maneuvering local routes to ensure products are delivered.

"We can not have non-locals identifying residential localities in a city. It is extremely difficult for them to do so. These requirements cut down a lot of people despite having large number of people wanting jobs, " says Sanjiv Kathuria, founder of DotZot, the e-commerce delivery arm of DTDC.

Baba Jobs co-founder Vir Kashyap says the shortage in workforce is an annual phenomenon and e-commerce portals have figured out a way to handle the challenge.

"There are people who come from smaller towns to work here, that helps to cover the shortage. Another thing is working movement within job categories, where a driver is also willing to be a delivery boy, helps cover some of the shortage," said Kashyap.

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STRAIN FOR STAFF

• Flipkart and Snapdeal commit to hiring 10,000 temporary staff for the festive season
   
• E-commerce industry requires 50,000 additional delivery staff to cater to festive demand
   
• Estimated 10 per cent shortage in delivery staff to be faced this festive season
   
• QuikrJobs has over 300,000 job applications for posts as delivery boy, driver
   
• High variable pay and low base pay keeps many people from taking up such jobs