HomeNewsQuick commerce platforms Blinkit and Zepto expand into e-commerce, targeting fashion, beauty,...

Quick commerce platforms Blinkit and Zepto expand into e-commerce, targeting fashion, beauty, electronics, and more

Two major quick commerce platforms, Blinkit owned by Zomato and Mumbai-based newcomer Zepto, are rapidly expanding into the realm of e-commerce. They are set to introduce a wide range of categories including fashion, beauty, electronics, toys, home, and kitchen, among others.

Zepto, which became the first unicorn of 2023, has reportedly achieved $1 billion in annualized gross sales according to insiders. Over the next two months, these platforms plan to add thousands of new SKUs, bringing the total to over 10,000, as they anticipate increased consumer engagement driving commerce through their platforms. This expansion beyond grocery and staples is expected to significantly elevate the scale of quick commerce, impacting established e-commerce rivals like Flipkart and Amazon, as well as local kirana stores, as per sources familiar with the plans.

Additionally, these platforms are strengthening their logistics networks to accommodate a diverse array of products and ensure seamless connectivity with dark stores for efficient deliveries. This represents a substantial strategic expansion from two years ago when quick commerce was emerging in India, involving a significant increase in the number of SKUs to facilitate faster delivery timelines.

Blinkit and Zepto have entered the fashion arena by collaborating with apparel companies and sellers to list brands such as Adidas, Pepe Jeans, Jockey, Manyavar, XYXX, and Mad Over Print. Although their venture into apparel is still in its infancy, insiders suggest that these companies could potentially emerge as preferred destinations for shoppers in specific scenarios. Zepto, based in Mumbai, is promoting its apparel offerings to potential users, emphasizing the demand for clothing and garments required on short notice.

Continue Exploring: Zomato’s Blinkit set to ramp up e-commerce deliveries with diverse product range

Zepto’s cofounder and CEO Aadit Palicha confirmed hitting $1 billion gross sale run-rate.

“We will be expanding our assortment into new categories like apparel, beauty, home and kitchen as consumer demand for these products is increasing on our platform,” Palicha said. “We are consistently seeing more frequent commerce taking place on the platform and the average user spend is increasing over a period of time. With new brands and categories, the ability to drive higher output per order within the same cost increases.”

He further mentioned that the company has been dedicated to this project since last year, recognizing that the potential total addressable market (TAM) for quick commerce is significantly larger than originally anticipated.

Albinder Dhindsa, the CEO of Blinkit, stated that the Gurugram-based company is currently in the experimental phase with the category and has not yet formulated a definitive strategy for this segment.

“We plan from the point of view of what the customer needs. On fashion, we’ve started some experiments but we don’t have a gameplan yet. Adidas started selling recently… they came onboard as a brand,” Dhindsa said. “It takes us about a year’s worth of work to have a thesis on what a category is. What you’re seeing in beauty today… work has been happening on that for the last 1-1.5 years… At any time we’re experimenting with five or six (categories).”

Continue Exploring: Quick-commerce unicorn Zepto considers reverse flip to India, targets IPO in 2026

During the first nine months of FY24, Blinkit recorded a Gross Merchandise Value (GMV) surpassing $1 billion. Swiggy witnessed a 63% increase in Instamart gross sales in the first half of FY24, as reported in a filing by Prosus.

BigBasket’s BB Now is another competitor in this segment but entered the market later and is now striving to catch up with its larger rivals. Dunzo, backed by Reliance Retail, effectively exited this market due to its own financial constraints.

That being said, it won’t be a simple task for quick commerce players to compete with established horizontal e-commerce giants. Success will largely hinge on execution across crucial stages, from sourcing to delivery.

“It won’t be easy at all. There are sectoral issues, for example in fashion with returns. Other segments too will have challenges but a lot of work is being put in place to find a solution because there is a consumer demand,” one of the top industry executives said.

“Offering width is challenging for ecommerce itself. Large products (by size) and value will still be driven by ecommerce but it would be interesting to see if quick commerce players can challenge ecommerce in a meaningful manner,” another senior ecommerce industry executive said.

Regarding price points, a senior executive in the quick-commerce sector mentioned that the cost of selling on quick commerce platforms may also become more rationalized for brands at a larger scale. Similarly, addressing product returns would be necessary, as it is not typically included in the framework when selling grocery and other daily items.

“We’ve seen brands sell the same products cheaper on Amazon because the cost of doing business with quick-commerce may be higher. But as we scale up, we are seeing them bring quick-commerce to parity…or in a few cases, go more aggressive on quick-commerce. But that’s their journey,” this person said, adding the same occurred with FMCG companies like HUL, Nestle, Mondelez. “But now that there’s a lot of buying on these platforms… and quick-commerce has become an important channel, they’re putting a lot more focus.”

Continue Exploring: Dunzo faces further setback as NCLT accepts insolvency plea filed by Velvin Packaging

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