The quick commerce sector is all set to heat up once again as India’s e-commerce giant is now eyeing the segment. Flipkart has started ramping up infrastructure for its quick commerce play, according to a report by Entrackr, citing three sources aware of the details of the plan.
“Flipkart will launch 10-15 minutes delivery in at least a dozen cities in the next six to eight weeks,” said one of the sources requesting anonymity. “It’s building up a chain of dark stores across several cities including Bengaluru, Delhi (NCR) and Hyderabad among others.”
As Flipkart ventures into quick commerce, experts foresee its rapid growth potentially overshadowing traditional e-commerce in India. A 2022 Redseer report estimates the total addressable market for quick commerce in India to be nearly valued at $45 billion. Notably, quick commerce has displayed remarkable resilience in recent years, with the success of platforms like Zepto and Zomato’s Blinkit convincing investors of its promising future in the Indian market.
Zepto secured a unicorn round, whereas Blinkit (formerly Grofers) witnessed a notable turnaround, and Swiggy Instamart experienced significant growth, highlighting their ability to scale up while enhancing margins for their stakeholders.
“If you look at Flipkart’s recent launches, it hints at the firm’s foray into quick commerce. It launched same-day delivery in 20 cities a couple of weeks ago… the company began delivering flowers and cakes around the Valentine season (February 2024),” shared an analyst specializing in e-commerce and quick commerce sectors, who preferred to remain anonymous.
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Reports suggest that Flipkart’s catalog is expected to be broader compared to incumbents like Zepto and Blinkit.
“The company will have a sharp focus on FMCG, grocery and daily essentials but it would also push categories such as electronics, fashion,” added the person quoted above.
It’s noteworthy that existing quick commerce players have been consistently broadening and diversifying their product offerings as well.
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Responding to queries, a Flipkart spokesperson said they are working towards delivering a wide range of products with speed. “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,” said the spokesperson. “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.”
Over the past three years, quick commerce has made substantial strides in the top 15 Indian cities, with the top three players in the segment—Blinkit, Swiggy Instamart, and Zepto—successfully expanding their operations. According to sources, BlinkIt fulfills approximately 600,000 orders daily, while Swiggy InstaMart and Zepto manage around 500,000 and 300,000 orders per day, respectively.
According to sources and publicly available data, Blinkit has an average revenue run rate of INR 12,000 crore in the ongoing fiscal year, while Swiggy Instamart’s ARR (read as GMV) stands at around INR 8,000-8,500 crore. Zepto’s gross merchandise value has neared INR 7,000 crore.
Following its recent funding round, Zepto has emerged notably more assertive, boasting a expanded catalog and intensified marketing efforts.
In contrast, Dunzo, backed by Reliance and Google, experienced a decline in momentum. Failing to secure a new funding round in the past two years, the company reported revenue of only INR 226 crore in FY23, coupled with losses amounting to INR 1,801 crore. Reports suggest that Flipkart has entered discussions regarding a potential acquisition of the Kabeer Biswas-led firm.
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While these developments may appear positive, the undeniable reality is that the market lacks sufficient size to accommodate numerous players, turning this into a battle for survival for most. Alternatively, exploring new operational models that guarantee sustainable growth might be imperative. The overarching trend of expanding catalogs and focusing on higher-value transactions, such as electronics, suggests that the competition will likely persist unabated.
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