India’s e-commerce giant, Flipkart, is gearing up to enter the quick commerce sector, Entrackr reported citing sources. The company plans to strategically establish a network of dark stores in cities such as Bengaluru, Delhi (NCR), and Hyderabad, intending to launch 10-15 minute deliveries in at least a dozen cities within the next six to eight weeks, it added.
Flipkart’s foray into quick commerce signals a strategic move, evident in recent launches such as same-day delivery in 20 cities and the delivery of flowers and cakes during the Valentine’s season in February 2024.
The company is expected to have a comprehensive product catalogue, with a focus on fast-moving consumer goods (FMCG), grocery, daily essentials, electronics, and fashion, distinguishing itself from existing players.
Competitive Landscape and Market Trends
Existing quick commerce players, including Blinkit, Swiggy Instamart, and Zepto, have been expanding and diversifying their offerings. These would be the players that Flipkart would directly compete with.
Top players in the quick commerce segment, such as Blinkit, Swiggy Instamart, and Zepto, have achieved significant scale. Blinkit processes approximately 6 lakh orders daily, while Swiggy Instamart and Zepto handle around 5 lakh and 3 lakh orders, respectively.
Financial data reveals Blinkit’s average revenue run rate of ₹12,000 crore in the ongoing fiscal year, Swiggy Instamart‘s ARR at ₹8,000-8,500 crore, and Zepto’s gross merchandise value nearing ₹7,000 crore.
“Over the past few months, we have made several investments to enhance our delivery capabilities, including adding same-day delivery in 20 cities. This covers mobiles, essential items, electronics, home appliances, fashion, books and lifestyle products. We are committed to meeting evolving customer expectations and delivering excellence in value, selection and speed, with more initiatives expected on this front in the coming months,” a Flipkart spokesperson told the publication.
Anticipating Shift in Market Dynamics
Despite the growth, the market faces challenges of sustainability and competition. Some players, like Dunzo, backed by Reliance and Google, have struggled to maintain their position, reporting lower revenue and facing funding challenges.
Discussions regarding potential acquisitions, such as Flipkart’s engagement with Dunzo, indicate the ongoing consolidation within the market.
Industry experts however anticipate a shift in market dynamics, with quick commerce gaining prominence over traditional e-commerce in India. The total addressable market for quick commerce in the country is valued at nearly $45 billion, according to a 2022 Redseer report.
Notably, quick commerce players such as Zomato’s Blinkit, Swiggy’s Instamart, and Zepto have demonstrated resilience, attracting investor confidence in the concept’s future in India.
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Published: 08 Mar 2024, 10:14 AM IST