Will Gen Zers Single-Handedly Grow the Last-Mile Delivery Market by $6 Billion?

A couple of weeks ago, I placed an order on Big Basket. Instead of giving me the delivery time options, it gave me a token to place my order two days later. With no other options during a lockdown, I complied.

A week later, I saw Big Basket listed as a store on Dunzo with a 1-hour delivery option. So, of course, I immediately opened the Big Basket app, only to find that they were still issuing tokens. Still, it was a moment of awe to realise that an online grocery delivery company is using another delivery service to sell their stock. 

But that’s just how competitive last-mile delivery has become post-COVID-19. 

For instance, India’s 373 million Gen Zers are fueling the last-mile delivery almost entirely by themselves. These 20-something youngsters are employed, financially independent and prefer to shop online than in a retail store.

Also, Gen Zers are an impatient lot looking both for instant gratification and the best deals. They don’t hesitate to cancel an order if they spot a better deal. And a “better deal” is not always about the cost. Often, it is about the speed of delivery too. 

Naturally, e-Commerce brands are capitalising on this demographic’s digital consumption. A greater part of their strategy is to make last-mile delivery as fast, efficient and seamless as possible. They want to reach this customer base before their competitors do.

Market research studies expect last-mile delivery to become a $6B profitable market in India by 2024, with 500 million shipments a year. The valuation of the present road logistics market in India stands at $240 billion. 

But why is China, a country with a higher population, not experiencing higher growth? 

It turns out the population control policies of China has created a majority of an ageing population. So how does that affect the trend of digital consumption? 

Gen Zers are early adopters of technology. Older generations are more inclined to choose their way of life over technology. To resolve this development problem, the Chinese government recently released a three-child policy to rejuvenate the population. But history is proof that when the fertility rate of a country goes down, it doesn’t always bounce back. 

While India has a lower rate of digital adoption, its Gen Zers are digital natives. They don’t think of online shopping as a luxury but as an essential. They embrace technology to ease their lives and value their time. They are drivers of the gig economy, choosing to work during their preferred timings, whereas ten years back, work meant a 9-5 job. 

Kamala Harris, the Vice-President of the United States, recently quoted, “In this moment, more than repair, we must reimagine.” And that’s what technologically driven companies like Big Basket and Dunzo are doing by leveraging each other’s strengths to strengthen their own game. That’s also why China, the world’s largest developing country, is changing its two children per family policy.

For more daily highlights on the global economy, please write to us at marketing@mobisy.com.