Hey folks, Pratham here

Happy New Year and welcome to Paradox Weekly, a Masters' Union Newsletter, where we break down the ideas, trends, and contradictions shaping business today.

I recently came across news about the gig worker strike that happened on NYE:

And just a few weeks ago, a Blinkit delivery rider from Uttarakhand posted a video showing his daily earnings.

28 orders. 14 hours. ₹762.

That's ₹27 per delivery.
One order paid him ₹15.83.
After fuel, he cleared maybe ₹15 per trip.

The video went viral.
AAP MP Raghav Chadha called it "systemic exploitation hidden behind apps and algorithms" in Parliament.

The same week, Blinkit's CEO Albinder Dhindsa told Bloomberg the quick commerce bubble is about to burst.

"Usually when this kind of imbalance exists," he said, "the correction is very swift. It often catches people by surprise."

What exactly is the imbalance he's talking about?

In the midst of our graduation ceremony, Shark Tank announcement and holidays, Masters’ Union has been ranked 5th among India’s Top B-Schools for One-Year Programs by Businessworld (BW)!

Got the chance to speak with Nitin Gadkari, Minister of Road Transport and Highways of India.

For all those who prefer notes over watching the full podcast.

Here are 10 ideas from the conversation I took away:

1. Start early. Don’t wait for permission.
Gadkari entered public life during the Emergency, at 19. By 26, he was contesting elections, and losing them. 

He calls that phase “fun.” That tells you a lot.

2. Low aim is the real failure.
His words, not ours. Constraints are real, while small thinking is optional.

3. Infrastructure problems aren’t single-layer problems.
One pillar. Three uses.
Road. Flyover. Metro.
That’s how he thinks about congestion.

4. Decision-making beats perfect honesty without action.
He’s blunt about this.
He’d rather work with someone decisive than someone paralysed by fear.
Speed and transparency matter more than indecision.

5. Teams don’t add. They multiply.
a² + b² is individual effort.
(a + b)² is teamwork.
The extra “2ab” is where outcomes come from.

6. When budgets don’t match ambition, change the model.
₹1,200 crore available.
₹22,000 crore demanded.
So he brought in PPP and BOT — and kept public money for rural roads.

7. Waste is just badly priced value.
Treated sewage water sold for ₹300 crore a year in Nagpur.
Urban waste used in highway construction.
“Waste to wealth” is accounting in this case.

8. Energy independence is an execution problem.
Hydrogen.
Ethanol from agri waste.
Fuel at ₹25 instead of ₹120.
That’s the direction of thinking.

9. Logistics decides who wins globally.
Get logistics costs to single digits, and exports change.
India’s auto industry moving from 7th to 3rd globally didn’t happen by accident.

10. Development should reduce human suffering.
Mechanised e-rickshaws ended manual pulling.
Rahveer rewards people who help accident victims.
Infrastructure isn’t neutral. It has moral weight.

Let me walk you through what happens when you order groceries at 10pm:

You place a ₹500 order.
The app promises 10 minutes.

Inside a 2,000 sq ft dark store, a picker locates your items from 6,000+ SKUs.
He has 2 minutes.
The bag goes to a rider waiting outside.
The rider delivers, and earns ₹20-30 for that delivery.
The platform pays another ₹20-25 in incentives to hit speed targets.

Total delivery cost: ₹50-70 per order.

Add dark store rent, picker wages, inventory holding costs, packaging.
The platform's total cost to fulfill your order: roughly ₹95-100.

Your order generated about ₹115 in revenue (product margins plus fees).

Contribution margin: ₹15-20. Maybe 3-4% of order value.

Now subtract the customer acquisition cost. Marketing. Technology. Corporate overhead.

The result: every ₹100 order loses money.

A dark store needs 300-400 orders daily just to break even.
In metros, they hit 1,100+ orders. In Tier-2 cities? Often below 350.

This is the structural math of the entire industry.
And the imbalance Dhindsa sees.

Albinder Dhindsa’s words hold weight.
He’s been here before.

In 2013, he co-founded Grofers.
The playbook was similar: raise money, subsidize growth, worry about unit economics later. 

By 2016, the company was burning ₹7 crore monthly on ₹5 crore revenue.

The company almost died.

Dhindsa had to make brutal cuts.
Pull out of cities.
Fire people.

Abandon the growth-at-all-costs mentality that had made Grofers a darling of tech media. 

He spent five years rebuilding it slowly. Focused only on metros where the math worked. Rebranded to Blinkit.

Finally, in 2022, Zomato acquired it for $568 million. A lifeline.

That stake is now worth roughly $13 billion. A 23x return in three years.

So when Dhindsa says "We will not chase growth for the sake of growth", listen.
He’s been through this “imbalance” before and he knows how it ends.

Quick commerce has created a strange wealth transfer.

On one side: upper-middle-class families in South Delhi and Bandra getting tomatoes delivered at 11pm for less than the kirana charges. The delivery is often free. The discounts run 20-25% off MRP.

Who's funding this subsidy?

Three groups:

First, investors. SoftBank, Temasek, sovereign wealth funds have poured billions into a model that has collectively lost over ₹5,000 crore quarterly. Zepto alone spent ₹1.29 to earn every ₹1 of revenue in FY24.

Second, riders. The industry employs 450,000-500,000 delivery partners. Most earn ₹18,000-25,000 monthly working 10-14 hour days. Without any health insurance or job security. Earnings that can change overnight when platforms adjust incentive structures.

Third, kirana owners. 200,000 stores closed in the past year alone. 45% of closures in metros, 30% in Tier-1 cities. Customer visits to remaining stores dropped by half.

The people who can most afford convenience are getting it subsidized.
The people who can least afford disruption are bearing the cost.

India's quick commerce bulls love pointing to structural advantages.

Labor costs in India run ₹20-30 per delivery versus $17-20 per hour in New York. Dark store rent is half of China's.

Urban density also means a single dark store can hit 1,100+ orders daily in metros. UPI makes payment frictionless. No big-box retail competitor exists.

These advantages are real, and are also why competition is intensifying faster than anywhere else in the world.

But the global graveyard of quick commerce is instructive:

Getir: $12 billion valuation at peak. Shut down US, UK, Germany, Netherlands in April 2024. 6,000+ jobs lost. Now Turkey-only.

Gorillas: Europe's fastest unicorn. Sold to Getir for $1.2 billion (60% below peak). Then shut down with Getir's retreat.

Gopuff: Cut 3,000 jobs. Closed 76 warehouses. $15 billion valuation now historical.

All had the same promises and endings.

India's response to this global carnage: double down.

Amazon is adding two dark stores daily. Flipkart Minutes crossed 500 stores. Reliance relaunched with 600 locations.

The three-player market is now six players.

All subsidizing and burning money.

And outside the top 8 metros, the numbers collapse. Orders per store drop from 1,100 to 350 in smaller cities. Logistics costs rise 25%. Average order values fall 35%.

The model that works in Gurugram may not work in Guwahati.

Everyone frames this as a question of timing. “Will quick commerce become profitable before the money runs out?”

I think that's the wrong question to ask.

Quick commerce works because of three arbitrages: cheap venture capital, cheap labor, and the willingness to destroy existing livelihoods.

Remove any one of those, and the 10-minute promise collapses.

If the answer is "the most sophisticated last-mile logistics network India has ever seen," then yes, this is valuable infrastructure. Dark stores, routing algorithms, inventory management at scale. Someone will capture that value eventually.

If the answer is "a temporary subsidy for affluent consumers funded by destroying functional retail and exploiting precarious gig labor," then we should be honest about what we're celebrating.

Dhindsa is warning us because he's seen both outcomes. Grofers nearly died from unsustainable growth. Blinkit has survived by pulling back. 

The question is whether the other players today will have the discipline to stop before they hit the same wall.

So what happens next?

My bet: Two of the big three survive. Everyone else runs out of money. Another 200,000 kirana stores close. The riders still earn ₹25,000 a month, if they're lucky.

And we'll call it innovation.

Here's my question for you: Have you stopped going to your local kirana? Why or why not?

I ask because I stopped going to mine six months ago.

I know the rider is underpaid. I know the kirana owner is struggling. I know the model loses money. And yet I keep ordering because the convenience is that compelling.

That's the real paradox here.

We understand the trade-offs intellectually. We see the economics. We read about the closures. And yet, we open the app so our tomatoes can arrive before we finish reading this article.

If you haven't made the switch yet, I'd love to know what's keeping you loyal to your local store.

I read every email.

Until next week,
Pratham