India’s Silicon Valley, the ‘Back-end of the world’ or simply a ‘Start-up hub’, call it what you will, but Namma Bengaluru’s penchant for technology and innovation remains undisputed. It is the city where you ‘Swiggy’ your meals and ‘Dunzo’ parcels across town. This happy place, despite traffic jams, was going about its business till COVID-19 struck. Bengaluru Urban and Rural have been declared Red Zones, and the lockdown has brought the city to its knees. Its streets are deserted, shops operate for limited hours and cops patrol the city to ensure no one steps out. But, this descent into silence has not dampened the spirits of the city’s entrepreneurs.
It’s a tale akin to Akira Kurosawa’s Seven Samurai, in which a village is rescued from tyrants by an unlikely bunch of warriors. In Bengaluru, we see how the ‘Samurais’ — a motley bunch of start-ups headed by seasoned entrepreneurs and nouveau aspirants — leverage technology to help the city get hold of their daily needs defying the ‘tyranny’ of COVID-19, that too through WhatsApp.
Can’t lock down innovation
The idea started out rather simple: When people queue up at local stores for their essentials, there is risk of social distance shrinking. To avoid this, Hari Prasad, co-founder of Cartoon Mango, a digital design and consultancy company decided to make a dashboard of Bengaluru’s shops that were open. Users would be able to order their essentials through it. To work on this, Prasad roped in his long-time mate Karthik Bhat, business head at ITW, a digital consultancy. The solution: a call centre on WhatsApp, through which locals could order their groceries and essentials. The orders would be fulfilled by procuring products from offline stores by any ‘runner’ (delivery agent) who was present in the vicinity.
Once they were sure about the concept, they pitched it to Bruhat Bengaluru Mahanagara Palike (BBMP). “BH Anil Kumar, the municipal commissioner, got onto a video call with us. We demonstrated the system by placing a live order, which got delivered within 15-20 minutes,” says Prasad with a hint of pride. BBMP realised the potential and by mid-April, the service expanded its footprint across Bengaluru.
The orders, received through WhatsApp or a toll-free phone number, are fulfilled by start-ups that have signed up for this initiative. While Swiggy, PharmEasy, Rapido and Dunzo take care of the delivery, the procurement is done from local kirana stores, pharmacies and supermarket chains such as Big Bazaar. Every delivery is made within 24 hours, at the doorstep, and payment can be cash-on-delivery or credited to the delivery agent’s account. The fee is a flat Rs.10, irrespective of order size (See: Smooth interface). The initiative has delivered 64,000 orders so far and clocks 900 orders daily across the city.
Behind the scenes
Now, how did this initiative come together? Creation of a seamless front-end requires a robust backend. Credit for that goes to Kaleyra, a global cloud-communications solution provider based out of Bengaluru’s Koramangala.
You might not have heard of them, but have surely come across their services. Here’s what they do: Every time you place an order on Swiggy, Flipkart, or need to verify your identity on PhonePe, you get an SMS with an OTP. That SMS system is handled by Kaleyra. The $126-million company also masks your phone number to maintain privacy. That is why you see a landline number when the delivery agent calls you for directions.
Keeping Kaleyra’s expertise in mind, Cartoon Mango approached them to build a chatbot for their WhatsApp delivery system. But that meant ensuring ease of use; a tall order. The potential users fell into one of three buckets. The first used the phone for making calls, and little else. The second were privy to the smartphone, could use WhatsApp, but were apprehensive about making online payments using apps such as Paytm and Google Pay. Third was the tech savvy lot who didn’t really need much help navigating their smartphones. It was necessary to cater to the first two categories, which mostly comprised senior citizens.
This is where the chatbot came in handy. No longer did senior citizens have to scramble through multiple apps. All they had to do was open WhatsApp and ping ‘hello’ to 08061914960 in the chat box. Immediately, the bot would be triggered. It then nudges you through the rest of the ordering process, with dropdown lists, depending on the requirement: medicines, vegetables, or groceries. “The bot won’t even ask you for your name, because when you type ‘hello’ into the message, your contact details are retrieved from WhatsApp’s database,” explains Aniketh Jain, chief revenue officer, Kaleyra. For those comfortable with making calls or for those who do not have a smartphone, the same number was provided as a toll free helpline. When a user calls the number, 7.ai’s customer engagement system logs the order.
All orders generated through Kaleyra’s bot and 7.ai’s helpline number are pooled into a repository created by Cartoon Mango. From the nearly 30,000 registered kirana shops, the platform has mapped 16,000 onto its platform. Once an order is generated, the platform maps it to the shop closest to the users — preferably within 1 km radius. It then passes the pick-up point, user’s location, along with the order details to delivery partners. The delivery agent will call the user to confirm the order or appraise him of any non-availability.
The shops receive the order on what the creators call a ‘round-robin model’. “The idea is that each small business owner should get some business through this system, and not direct all the order to one single store. So the first order in a locality goes to store 1, the subsequent orders go to store 2, and so on until all the stores in the locality have been covered. Then, the cycle repeats over,” explains Brijesh Bharadwaj, director of products, Dunzo. The round-robin model is also at play for delivery partners. The cyclical model helps with social distancing by not having all the delivery partners standing in a queue at the same store, believes Kartik Mishra, head-strategy and new initiatives, Dunzo. Once the order is received, it is passed to all the delivery entities. In case the order can’t be fulfilled by one, it is passed on to another. The entire orchestration of assigning the shop and runner is based on a sophisticated set of algorithms designed by Cartoon Mango.
Initially, Dunzo was doing the heavy lifting for deliveries. In the last two weeks of April, Rapido, Swiggy, and Pharmeasy too joined in. Integrating these start-ups onto one platform was fairly easy, says Aravind Sanka, co-founder, Rapido. “We already help Dunzo and Swiggy with their deliveries. As a result, we had the technology stack to collaborate with other delivery players. When BBMP and Kaleyra came to us for integration, our open-API framework was ready,” he adds.
A crucial aspect of negotiation with all partners was the delivery fee, which is currently capped at Rs.10. Dunzo usually charges Rs.35-40 on an average delivery. The figure drops to about Rs.25 for Swiggy, Zomato, and FreshMenu. In the initial days, the delivery fee was waived off completely. “But we felt that wasn’t fair to runners and other businesses,” says Prasad.
So what are people ordering? As per Bhat, 25% of the orders are for medicines and the rest are for groceries and fresh produce. Hence, Pharmeasy was crucial in ideating and implementing the pharmacy fulfilment part. “We understand the nuances of what people want and what is required in the overall process level as well,” says Dharmil Sheth, co-founder, PharmEasy. Deliveries handled by Dunzo, Rapido, and Swiggy typically arrive within 1-2 hours. However, orders for medicines require uploading and verification of the user’s physical prescription. Hence, such deliveries could take up to a day.
As for order size, most orders fall in the Rs.350-400 range. Hence, the runners keep Rs.1,000 handy to make purchases. In the case of Dunzo, that initial cash flow is managed in-house. When an order comes in, the delivery partner’s card receives the required amount to make the purchase. The money is later collected from the buyer.
To fulfil orders, there is a robust fleet on the ground. Prasad states that Dunzo and Rapido have 500-plus runners each for this activity alone and can handle 7,000 orders each. Shadowfax has 250 runners, Housejoy has another 100-200, while Swiggy is known to have over 10,000 delivery personnel in Bengaluru.
While the overall integration has been fairly smooth, there have been a few hurdles that cannot be overlooked. Let’s take cash on delivery for instance. Senior citizens typically prefer paying cash and may not trust online payment channels. “We did not have order pick-up and cash collection in our regular process flow. Two of our engineers literally built this process flow overnight,” says Bharadwaj.
The other challenge was to train its runners so that they could deliver orders in a contact-less manner. So the start-ups created training videos and sent it to all their delivery partners. At Dunzo, Mishra says that a dedicated business team ensured that the debit cards of delivery agents never ran empty. There’s also a support team that handles customer queries in case a store is closed, or one of the delivery partners has trouble collecting the order.
Then, running the show is no cake walk. Obtaining passes for delivery agents proved to be a task and so was coping with misuse and crank calls. Bhat cites the example of a user who placed an order for 30 items and then refused to take delivery. There was also an order for 100 litres of petrol.
Bizarre requests aside, none of the contributors approached it as a money making project. “We didn’t even prepare a cost sheet,” says Bhat. However not all partners are sure of the sustainability of this non-profit model. Mishra says such pricing is not possible unless the government absorbs some of the delivery costs on behalf of the end user. Jain, too, agrees that the current delivery system isn’t financially viable in the long run.
In contrast, Sanka is more optimistic. “Post this lockdown, I see people being scared of venturing out. As a result, hyperlocal, doorstep delivery will see immense scale,” he says. He adds that, if not BBMP, some private entity will surely commercialise such a system. His team at Rapido sees this model as a long-term vertical to scale grocery ordering online. Of course, the unit economics would be dramatically different from BBMP’s initiative.
It is important to note that close on the heels of raising $5.7 billion from Facebook, Reliance Jio announced the launch of a WhatsApp-based online portal called JioMart on April 27. Currently in a pilot phase in Navi Mumbai, Thane and Kalyan region in Maharashtra, the service allows customers to order through a WhatsApp number. These are early days, but it is a no-brainer that when Mukesh Ambani invests in a sector, he is there to win. But that’s another story. For now, it is impressive how start-ups in Bengaluru have done their bit to keep the city going.