The quick commerce sector in India is witnessing rapid growth, with platforms such as Blinkit, Zepto, and Swiggy‘s Instamart reporting remarkable surges in revenue from advertising.
Blinkit registers fourfold revenue growth from ad
Blinkit, the market leader, reported a nearly fourfold jump in ad revenue to more than INR 400 crore for 2023-24, and is on track to earn more than INR 1,000 crore from ads in this financial year. Zepto is also on a INR 1,000 crore revenue run-rate from advertisement services, which offer higher margins to companies than other revenue lines.
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According to ET, “One of the obvious reasons why brands want to advertise on quick commerce increasingly is that the user base on platforms such as Blinkit, Zepto and Instamart is expanding at a rapid pace,” said a quick commerce executive, who did not wish to be identified.
Further, Blinkit’s monthly transacting customers nearly doubled to 8.9 million in the July-September quarter, compared to 4.7 million a year ago. The nature of quick commerce is also such that to achieve inventory offtake quickly, brands tend to spend on ads to stand out for their consumers. Platforms have been investing in technologies for advertising to be more effective for brands.
Flipkart, Amazon reports INR 11,621 Cr ad revenue in FY24
The scale of ad revenue for quick commerce firms is also being achieved faster than e-commerce marketplaces such as Flipkart and Amazon, which together reported INR 11,621 crore in ad revenue for 2023-24. SoftBank-backed ecommerce marketplace Meesho also derives a sizable portion of its operating revenue from advertising income.
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For Meesho, it also comes with fatter margins than its logistics services. Overall, Blinkit is clocking an annual gross sales run rate of nearly $3 billion, while Zepto is tracking $2 billion. According to its latest public numbers available, as of June 30, Swiggy Instamart was at an annual gross sales run rate of $1.3 billion.
Industry executives also indicated that income from advertising is highly profitable for consumer internet platforms, with 90-95% of it flowing to profit. “Today we are at an Rs 1,000 crore annualised revenue run-rate (from advertising)… it’s a meaningful driver of the bottomline,” said Zepto founder and CEO Aadit Palicha.
In its initial public offering prospectus, Bengaluru-based Swiggy said, “We plan to increase the contribution of advertising revenue further by enhancing our advertising tools such that our partners can continue to leverage our integrated platform to run unique and customised advertising campaigns, which are backed by rich insights and analytics.”
