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e-Commerce

Quick Commerce Thrives in India Amid Global Slowdown

Rary Maharani
Last updated: March 25, 2024 2:54 am
Rary Maharani
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2 Min Read
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  • India’s quick commerce thrives as top players expand nationwide.
  • Blinkit leads the market, followed by Instamart, Zepto, and BB Now.
  • Players seek margin improvements through diversification and ad revenue.

Contents
A promising market for quick commerceTop players expand reachProfitability remains a key focus for investors

A promising market for quick commerce

Despite the fading popularity of quick commerce in many markets and the closure of several heavily funded startups over the past two years, India stands out as a remarkable exception where the model of delivering items to customers within 10 to 20 minutes appears to be thriving.

India’s quick commerce market has experienced a remarkable tenfold growth between 2021 and 2023, driven by the sector’s ability to meet the unique needs of urban consumers seeking convenience for unplanned, small-ticket purchases.

Top players expand reach

Zomato’s Blinkit leads the quick commerce market in India, capturing 46% of the market share by GMV in the December quarter, followed by Swiggy’s Instamart at 27%, newcomer Zepto at 21%, and Bigbasket’s BB Now at 7%, according to brokerage firm JM Financial.

These top players are expected to expand their reach to 45 to 55 cities within the next 3 to 5 years, up from the current 25 cities. Dark stores, the backbone of quick commerce operations, have significantly increased their product offerings, now carrying over 6,000 SKUs per store, compared to the 1,000 to 1,500 items typically stocked by traditional neighborhood Kirana stores.

Profitability remains a key focus for investors

Although the convenience offered by quick commerce is undeniable, profitability remains a concern for investors. Blinkit aims to achieve adjusted EBITDA break-even by the first quarter of fiscal year 2025, while Zepto has set its sights on EBITDA profitability in 2024.

Swiggy’s Instamart is also focusing on profitability, with the parent company indicating that the peak of investments in the business is now behind them.

These players are exploring various strategies to improve margins, such as expanding beyond the grocery category, increasing advertising revenues, and exploring private label strategies in certain categories.

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