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Competitors unfazed by Flipkart's 10-min delivery foray

August 07, 2024 20:34 IST

At a time when Flipkart has entered the quick-commerce race with a service called “Minutes”, executives at rival players said they are in a wait-and-watch mode.

Flipkart

Photograph: Abhishek N Chinnappa/Reuters

They said they would be concerned only once the e-commerce firm is able to succeed in this space.

The Walmart-owned firm’s quick-commerce service has gone live in some parts of Bengaluru, putting it in competition with firms such as Zepto, Swiggy’s Instamart, and Zomato’s Blinkit.

 

Flipkart had been planning to enter the 10-minute delivery service space for the past few months.

According to industry sources, 15-20-minute deliveries provided by players such as Zepto, Instamart and Blinkit are taking a major portion of the sales of products away from Flipkart and Amazon.

“The big question is whether they can offer more selection and value in the fastest time possible,” said an executive at a rival company.

The executive said that Flipkart differentiates itself by providing e-commerce service to Tier-2 and -3 cities, and Bharat, and it would be a challenge for them to scale up quick-commerce to such locations.

Another executive said that it would be a concern for players such as Zepto, Instamart and Blinkit, if Flipkart can execute a better quick-commerce service.

“This way customers don’t have to have multiple quick commerce apps.

"All of the shopping can be done in just one app,” he said.

Blinkit CEO Albinder Dhindsa said the firm’s priority is to ensure customer satisfaction and improve its capabilities in the long run.

“Competitive intensity in the quick-commerce category has been high since the phrase ‘quick commerce’ was coined,” he recently said in a letter to shareholders, while announcing Blinkit’s June-quarter results.

“Recently, some players have been spending more on marketing and subsidies.

"However, our customers, who value quality of service and reliability, seem to be unaffected and that reflects in our performance for the quarter, where we have grown over 20 per cent without the need to match the spends or subsidies of our competitors,” he added.

Blinkit plans to keep up its expansion spree at the cost of lower short-term margins and aims to increase its dark store count to 2,000 from the current 639 by the end of 2026.

Most of these stores will be in the top 10 cities in India.

Beyond the large cities, the size of the market is still undiscovered.

In Zomato’s June-quarter results, Blinkit outpaced the company’s core food delivery business both in terms of adjusted revenue and gross order value (GOV) growth.

The quick-commerce vertical’s GOV and revenue grew at over 22 per cent quarter-on-quarter (Q-o-Q) versus food delivery, which grew at over 10 per cent across both metrics.

The company’s GOV in the June quarter stood at Rs 4,923 crore, up from Rs 4,027 crore a quarter ago.

Mumbai-based Zepto, another rapidly growing quick-commerce firm, also remains unperturbed by the entry of larger incumbents.

“This is probably the least competitive period we have had since we started the firm.

"Around 18-24 months ago, there were many more players who don’t exist anymore.

And even at the most intense competitive periods, the company continued to perform well,” Zepto CEO Aadit Palicha had told Business Standard.

ARYAMAN GUPTA & PEERZADA ABRAR
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