The concept of quick commerce in India, ensuring the delivery of groceries and various items within 10 to 20 minutes, seemed like a dream a few years ago. However, the competition in this sector is currently intensifying, with dominant players like Tata’s BigBasket, Swiggy’s Instamart, Zomato’s Blinkit, and Zepto leading the market. Interestingly, Walmart-owned Flipkart is set to join the bandwagon.
Flipkart is gearing up to launch its own quick delivery service, promising to bring products to doorsteps within a lightning-fast timeframe of 10 to 15 minutes. Inside sources have disclosed to Entrackr that this ambitious initiative will kick off in a dozen cities over the next six to eight weeks. The e-commerce giant is strategically setting the stage by creating a network of dark stores in key urban centres, including Bengaluru, Delhi (NCR), and Hyderabad, among others.
Diversification and Expansion
Companies such as Zepto and Blinkit are expanding their footprint beyond conventional e-commerce by diversifying into categories like fashion, beauty, electronics, toys, home, and kitchen. In the coming months, both platforms are set to expand their product offerings to over 10,000 stock-keeping units (SKUs) in response to increasing consumer demand for frequent purchases. To elevate their e-commerce prowess, Zepto and Blinkit have forged partnerships with prominent apparel firms, including Adidas, Pepe Jeans, Jockey, Manyavar, XYXX, and Mad Over Print.
In contrast, Flipkart has been diligently working to reduce delivery timelines across various categories. The company recently introduced same-day delivery services at no extra cost in 20 cities, covering major metros like Delhi and Bengaluru, as well as smaller towns like Guwahati and Ludhiana.
In addition to its broader e-commerce strategy, Flipkart has also ventured into the quick hyperlocal delivery space with Flipkart Quick, catering to grocery needs. This service promises delivery of fruits and vegetables within 90 minutes or a two-hour time slot. Expanding its offerings, the company has embraced the festive spirit by extending its offerings to include flowers and cakes, a timely addition around the Valentine’s season in February 2024.
Sources suggest that Flipkart is gearing up to offer a more extensive catalogue compared to competitors like Zepto, Instamart, and Blinkit. While maintaining a strong emphasis on fast-moving consumer goods (FMCG), groceries, and daily essentials, the e-commerce firm is poised to diversify its offerings into additional categories such as electronics and fashion.
“We are committed to meeting evolving customer expectations and delivering excellence… with more initiatives expected on this front in the coming months,” a Flipkart spokesperson said in response to queries sent by Entrackr about the quick-commerce venture.
India’s Quick Commerce Market
India’s quick-commerce sector has experienced remarkable growth, with its Gross Merchandise Value (GMV) skyrocketing from a mere $0.04 billion in 2019 to an impressive $2.8 billion in 2023, as reported by Redseer. This growth is particularly noteworthy given that 2023 was considered a slow consumption year, showcasing a robust 77% YoY increase in GMV. The primary drivers of this surge are the GenZs and millennials residing in major urban centers such as Bangalore, Delhi NCR, and Mumbai, who continue to lead the charge in embracing quick commerce.
It is important to note that in the last couple of years, the quick-commerce sector in India has displayed surprising resilience, with key players like Zomato’s Blinkit, Swiggy’s Instamart, and Zepto successfully convincing investors of its enduring potential. This trend is exemplified by Zepto’s attainment of unicorn status, Blinkit’s notable turnaround (formerly Grofers), and Swiggy Instamart’s substantial growth, all contributing to the scaling up of these ventures with improved margins for their stakeholders.
The success of India’s leading quick-commerce startups is evident in their impressive operational metrics and robust financial performance. Blinkit, for instance, efficiently processes a staggering 6 lakh orders every day. Similarly, Swiggy Instamart and Zepto, two other major players in the sector, manage substantial daily volumes of around 5 lakh and 3 lakh orders, respectively.
Turning attention to their financial achievements, Blinkit stands out with an impressive average revenue run rate of Rs 12,000 crore in the ongoing fiscal year. Swiggy Instamart maintains a strong financial position, with an ARR (GMV) ranging between Rs 8,000-8,500 crore. Zepto, a rising force in the industry, has achieved a gross merchandise value nearing Rs 7,000 crore.
However, not all players have fared equally well. Reliance and Google-backed Dunzo faced challenges in failing to secure a new round of funding in the past two years. The startup witnessed a massive 288.1% YoY increase in its losses, amounting to Rs 1,801 crore in FY23. Amidst these challenges, reports suggest that Flipkart is in discussions regarding a potential acquisition of Dunzo.
As the competition in India’s quick commerce market heats up, it would be interesting to see who will win as the ultimate winner. The question arises: How will Flipkart outperform its rivals, including Swiggy Instamart, Zomato’s Blinkit, and Zepto, in attracting a larger customer base for its superfast 10-15-minute delivery of groceries and other items?
