E-commerce businesses in India are rapidly hiring delivery staff, fearing that a shortage of labor will force them to miss out on one of the busiest annual shopping seasons, which is slated to start in earnest next month.
The moves come in the midst of a tightening labor market – India’s unemployment rate fell below 7% in July for the first time since January – and persistently high inflation, complicating the outlook for an industry that has long struggled with chronically high employee turnover.
“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,” TK Balakumar, chief operating officer at online grocery seller BigBasket, told the media.
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The Tata group-backed company increased the number of couriers in its instant delivery section BB Now to 2,200 in the June quarter, up from 500 in the March quarter. It intends to increase the number to around 6,000 by March 2023.
BigBasket and other e-commerce companies, like Dunzo, employ their own delivery staff, whereas others, such as cosmetics-to-fashion retailer Nykaa, depend on third parties for the delivery of their products.
According to a report released in June by the think tank NITI Aayog, gig work employment in India is expected to reach 9.9 million in 2022-23, an increase of about 45% from 2019-20.
“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,” said Sekhar Garisa, strategy chief at business services provider Quess Corp.
Businesses such as Quess and TeamLease act as go-betweens for e-commerce firms and job seekers in the country’s Tier 2 and Tier 3 cities. Some businesses are optimistic that the labour shortage will 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,” Kabeer Biswas, chief executive officer at Dunzo, told Reuters.
Dunzo currently has 75,000 delivery partners and is supported by Reliance, a company owned by Indian billionaire Mukesh Ambani.