Flipkart Enters India's Quick Commerce Market

Quick Commerce Market in India: Key Insights 

• Market Expansion: India's quick commerce market is rapidly expanding, forecasted to grow from US$1.57 billion last year to over US$8 billion in a few years, driven by demand for ultra-fast deliveries and strategic moves by major players like Flipkart.

• Blinkit's Valuation Surge: Blinkit, driven by urban demand for convenience, has surpassed Zomato's food delivery in value, with Goldman Sachs valuing it higher following Zomato's Q1FY25 profit and a market cap of US$30 billion.

• Intense Competition: Flipkart Minutes will face stiff competition from Blinkit, Swiggy Instamart, and Zepto, who are rapidly expanding their dark store networks, intensifying the battle for dominance in India's quick commerce sector.

Walmart-owned Flipkart, India's largest eCommerce company, has launched its quick commerce service, Flipkart Minutes, in India. 

This new service promises delivery of a wide range of items, from groceries to smartphones, within 10 to 15 minutes. To understand the significance of this development, we need to look at the market as a whole. 

Quick Commerce Market in India 

The quick commerce market in India is rapidly growing, attracting major players despite its challenges in other regions. Flipkart's entry into this sector, following the success of rivals like Blinkit, Zepto, and Swiggy Instamart, stands as a testament to the increasing demand for ultra-fast delivery services among urban consumers.

• Estimated to be worth only US$6.24 million right before the pandemic, the quick commerce market in India hit US$44.8 million by 2020.

• Continuing its growth, the market hit US$1.58 billion last year.

• India’s quick commerce market is forecast to reach US$3.35 billion by the end of this year. In a few years, we might be looking at a market that’s above the US$8 billion mark. 

Flipkart's strategic move involves leveraging hundreds of small warehouses, known as dark stores, to facilitate rapid deliveries. The company plans to establish around 100 dark stores by the festive season, a move that will enhance its quick commerce capabilities. 

This initiative is seen as a way to compete with Amazon, which has focused on same-day delivery for Prime members and has shown little interest in the quick commerce space.

Blinkit Surpasses Zomato's
Food Delivery in Value 

Driven by urban consumers' preference for convenience, the quick commerce market in India has shown resilience and growth.

Goldman Sachs estimates that Blinkit, the leading player in this space, is already valued higher than its parent company's food delivery operations. Blinkit's valuation boost came after Zomato reported a Q1FY25 profit of US$30 million, pushing its market cap to US$30 billion.

Flipkart's entry into quick commerce comes at a strategic time, as it aims to capture a larger share of the urban market dominated by Amazon. The Bengaluru-based firm raised US$350 million from Google in May, signaling a significant investment in its quick commerce ambitions.

Market Competition Intensifies 

With Flipkart Minutes, the company will face intense competition from established players like Blinkit, Swiggy Instamart, and Zepto, all of which are expanding their dark store networks. Blinkit aims to reach 2,000 dark stores by 2026, while Zepto plans to double its presence to 700 by March 2025. Swiggy Instamart currently operates over 500 such warehouses. 

As Flipkart rolls out its quick commerce service, the battle for market dominance in India's fast-growing quick commerce sector intensifies, promising faster deliveries and greater convenience for consumers.

Sources: TechCrunch, Economic Times, Entrepreneur India, Entrackr, CNBC-TV18, Statista, ECDB