Quick Commerce Surge and AI Revolution: ETtech Morning Dispatch
Happy Friday! Quick commerce players are witnessing a steep surge in their monthly cash burn. This and more insights are covered in today’s ETtech Morning Dispatch.
Highlights in This Edition:
- Interview with Canva co-founder
- Nazara Technologies Q3 results
- Ola Consumer FY24 revenue decline
Race to Deliver Fast Intensifies
The monthly cash burn for quick commerce companies, including newcomers, has surged to Rs 1,300-1,500 crore, doubling in just a few months. This trend highlights the intense competition for user acquisition.
Why It Matters:
Publicly listed companies like Zomato and Swiggy, operating two of the top three platforms in quick delivery, are under stock price pressure due to profitability concerns. Yet, the sector continues to gain traction with urban consumers.
What’s Next?
Industry executives indicate that mounting pressure from stock markets, alongside a potential IPO for Zepto, may calm the competitive frenzy.
Insight from Experts:
“Most investors believe that Q1FY26 will likely present a better landscape, as Zepto prepares for an IPO in H2FY26, which may lead to diminished competitive intensity,” noted UBS Global Research in a recent analysis.
Comparing Eras:
Analysts perceive a crucial difference between the current competition and the earlier battles between Amazon and Flipkart in India’s ecommerce sector: heightened investor scrutiny is firmly placed on publicly listed firms today.
Major BPMs Embrace Agentic AI for Enhanced Automation
With artificial intelligence leading the charge in automation, prominent business process management (BPM) companies such as Genpact, EXL, and WNS are exhibiting strategic pivots. They are investing in the development and deployment of AI agents to facilitate end-to-end workflow automation.
Transformative Approaches:
- Genpact is transitioning all its existing workflows to an agentic architecture.
- EXL predicts that 60-70% of traditional roles, particularly in customer service and transaction processing, may become obsolete.
- WNS is “productizing its services,” shifting towards an “AI+HI” (Human Intelligence) model.
Explained:
Executives assert that use cases for agentic AI span various processes, including customer service, order management in retail and ecommerce, insurance claims processing, and supply chain operations.
- Powered by large language models, this technology can reason instead of merely executing tasks.
- It holds both long and short-term memory to grasp context around specific functions.
Impact on Employment:
Despite the significant shift, industry insiders emphasize the necessity of a human-in-the-loop, although for a limited time. Gaurav Iyer from EXL stated, “Jobs may dwindle in conventional roles by 60-70%, but demand in data and AI sectors is anticipated to surge by 100-120%.”
Canva’s Aspirations for Growth in India
Cameron Adams, Co-founder, Canva
According to co-founder and chief product officer Cameron Adams, India is poised to potentially become Canva’s largest market within the next three to five years.
Current Market Status:
India has emerged as Canva’s fourth-largest market, following the US, Brazil, and Indonesia.
Strategy for Growth:
In India, Canva aims to increase user engagement and revenue through localized offerings and a focus on enterprise clientele, aligning with their global strategy.
Localisation Efforts:
Canva plans to launch a Hindi version of its website, which will expand accessibility to its services for users in India.
Workforce Expansion:
Over the past year, Canva has doubled its workforce in India, adding roles across engineering, marketing, sales, and content departments.
New Subscription Models:
To cater to the Indian market, Canva has localized its subscription services, offering daily and weekly (sachet) packs. Adams mentions, “In India, it’s critical for users to access these resources on a daily or weekly basis.”
Other Top Stories by Our Reporters
Nazara Technologies’ Q3 Results:
Online gaming company Nazara Technologies reported a 53% year-on-year decrease in net profit, totaling Rs 13.6 crore for Q3FY25, despite a notable revenue increase.
Ola Consumer Revenue Decline:
Ola Consumer reported a 21% fall in FY24 revenue, amounting to Rs 2,368 crore, down from Rs 3,000 crore in FY23 across their ride-hailing, financial services, and logistics sectors.
Google’s DEI Rollback:
A senior Google executive indicated that the recent rollback of diversity, equity, and inclusion (DEI) initiatives in recruitment is primarily US-centric, with minimal impacts expected in other regions.
Leadership Change at Swiffy Labs:
Lizzie Chapman, co-founder of ZestMoney, has departed from Reliance-backed Swiffy Labs, a fintech firm she initiated after ZestMoney ceased operations in August 2023.
Global Picks We Are Reading
DOGE Is Gutting a Key U.S. Technology Agency
Arm’s CEO on AI’s Future Amidst Competitive Landscape
Teens From Asia Migrating to Taiwan for Semiconductor Job Opportunities
Questions & Answers
- What is the current cash burn for quick commerce companies in India?
The current cash burn for quick commerce companies, including newcomers, ranges from Rs 1,300 to Rs 1,500 crore per month. - Why are Zomato and Swiggy under stock price pressure?
Zomato and Swiggy are facing stock price pressure due to concerns regarding the profitability of the quick commerce sector. - How is agentic AI impacting BPM companies?
Major BPM companies are integrating agentic AI to automate processes, streamlining operations while facing potential job losses in traditional roles. - What growth strategy is Canva pursuing in India?
Canva is focusing on localized offerings and targeting enterprise customers to enhance its growth in the Indian market. - What significant change has occurred in Ola Consumer’s revenue?
Ola Consumer reported a 21% decline in revenue for FY24, with a total of Rs 2,368 crore compared to Rs 3,000 crore in FY23.
