Zerodha’s Nikhil Kamath Compares Mumbai’s Dabbawalas With E-Commerce; Ignites Debate on Future of Logistics

Zerodha co-founder Nikhil Kamath recently compared Mumbais Dabbawalas with e-commerce giants to highlight the success of their low-tech yet highly efficient business model. Citing the example of Mumbai's iconic tiffin delivery service provider, Nikhil Kamath shared his two cents on the need to focus on sustainability and delivery speed in India amid its growing GDP per capital and wages.

While sharing the story of Mumbai's Dabbawalas with graphic images on X, Nikhil Kamath, also mentioned his own experience of online delivery. In his social media post, Kamath, mentioned how he regretted purchasing a pair of shoes online because of its incorrect size. At the same time, he mentioned the benefit of going to store where people can try multiple items.

Store Experience vs Online Purchase

"I recently bought a pair of Hoka shoes via quick commerce while travelling-turned out a bit tight, and I regretted it instantly. At Rs.20k for a pair of shoes, the price bakes in the experience of going to a store, someone suggesting which shoe based on foot shape etc and treating u in a certain way...," wrote the co-founder of a bootstrapped firm on X.

Later, he questioned how many people are willing to leave the store experience on high-value goods and mentioned a product's 'average order value' (AOV).

"Is there a cap to aov? Also, what's the volume of consumers who don't care enough in India and will forego the store experience on high-value goods?," he added in his post.

What E-Commerce Firms Can Learn from Mumbai's Dabbawalas?

The graphic story of Mumbai's Dabbawalas shared by Nikhil Kamath on X sheds light on their highly efficient business model. It also highlighted how the use of ecofriendly options made their business highly sustainable and unique to thrive in minimal competition. The 'Blue ocean strategy', opted by Mumbai's Dabbawalas helped them to build a unique service with low competition from courier companies due to low cost and high efficiency.

When work from home and hybrid working became a reality for most of the companies post-COVID, Mumbai's Dabbawalas embraced technology to expand their services. They launched their DigitalDabbawala app to use their low-cost network for delivery of documents, laundry and more. They also partnered with other cloud kitchens to allow customers to order fresh, home-cooked food directly.

The Story of Mumbai's Dabbawala

Mumbai's Dabbawala business model has gained international recognition and has been taught in top management schools and marketing courses. Its efficiency model is also covered by several international institutions including Harvard. Founded in 1890, Mumbai Dabbawalas is an army of nearly 5,000 men who are identified with their simple and sobber attire of white outfits with Gandhi caps.

Their primary job is to deliver home-cooked food to the middle class working professionals in Mumbai. These 5,000 people ensure to deliver food to nearly 2,00,000 people on time during their office hours.

The business model relies heavily on Mumbai's local trains. As per Kamath's post, every dabbawala serves nearly 30 customers and earns nearly Rs 9,0000- Rs 12,000 per month. The low wage for highly efficient delivery is unmatchable against e-commerce delivery services. To provide lunch to customers on time, tiffin boxes are transported from multiple stops and exchange many hands before reaching to the end customer. After the lunch, these boxes are sent back as per the same process followed in morning.