Flipkart's Quick Commerce Revolution: Reshaping India's Online Retail Landscape
🔍Insights
India's leading digital commerce entity Flipkart is working to venture into the fast-paced world of quick commerce to meet the burgeoning demand for rapid delivery of everyday essentials.
Flipkart has recently unveiled its latest initiative of same-day delivery service now available in 20 major Indian cities.
This strategic move underscores Flipkart's unwavering dedication to elevating customer satisfaction, and convenience and to revolutionize the eCommerce landscape.
“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," Walmart-backed Flipkart said in a statement.
This new initiative of same-day delivery will be for customers across cities including Ahmedabad, Bangalore, Bhubaneshwar, Coimbatore, Chennai, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Lucknow, Mumbai, Nagpur, Pune, Patna, Raipur, Siliguri and Vijayawada.
It would cover products like mobiles, essential items, electronics, home appliances, fashion, books, and lifestyle goods. The customers will get their products delivered before midnight if they place their orders by 1 pm without any extra charge.
Flipkart Likely To Launch Quick Commerce Services
Key Players
Flipkart's introduction of same-day delivery service represents a significant advancement in the Indian eCommerce market.
“We have invested in cutting-edge technologies, leveraged data analytics, and harnessed insights on demand patterns to ensure that we are well-equipped to anticipate and fulfill demand the very same day. I must acknowledge the hard work and dedication of our teams who have tirelessly contributed to making this vision a reality,” said Hemant Badri, Senior Vice President, Head of Supply Chain, Customer Experience & ReCommerce Business, Flipkart Group.
In the past year, quick commerce has surged into a billion-dollar industry with platforms like Blinkit, Zepto, and Swiggy Instamart poised to exceed USD 1 billion in revenue in the financial year 2023-24.
The surge in quick commerce has captured Flipkart's interest, prompting the eCommerce giant to enhance its emphasis on the grocery sector.
As quick commerce constitutes approximately 40% of online grocery delivery, it is increasingly fueling growth. Flipkart's renewed focus on grocery aligns with a broader transition away from conventional eCommerce models centered on sales and discounts.
As of now, these apps are providing quick commerce to consumers in major Indian cities:
| Blinkit | Swiggy Instamart | Zepto | |
|---|---|---|---|
| Started operations in | January 2022 | August 2020 | April 2021 |
| Revenue as of FY 2023 (in Rs crore) | 724 | 3221 | 2024 |
| Revenue as of FY 2022 (in Rs crore) | 236 | 2036 | 142 |
| Funds raised for quick commerce (in U.S.$ million) US$ 1 mn = Rs 8.2 cr |
569 | 700 | 361 |
| Current market share (in %) | 40% | 37-39% | 20% |
It's essential to acknowledge how its rivals have also expanded into quick commerce to meet evolving customer demands.
Here's how some of Flipkart's competitors have ventured into quick commerce:
Amazon India
Amazon has been a key player in the Indian eCommerce sector, and it has also delved into quick commerce to enhance its delivery capabilities. The company offers Amazon Prime Now, which provides ultra-fast delivery of essentials, groceries, electronics, and more within a few hours.
Reliance Retail
Reliance Retail, through its digital arm JioMart, has been rapidly expanding its presence in the e-commerce space. Leveraging Reliance's extensive network of physical stores and warehouses, JioMart offers quick delivery of groceries, household essentials, and other daily items.
BigBasket
As a leading online grocery platform in India, BigBasket has capitalized on the growing demand for quick delivery of essential items. The company offers express delivery services for groceries and household essentials, ensuring that customers receive their orders within a few hours. BigBasket has the quick commerce feature BB Now too to get groceries delivered in 15-30 minutes.
Blinkit
Grofers now Blinkit has rebranded itself to reflect its commitment to rapid delivery. With its extensive network of local partners and warehouses, Blinkit ensures that customers receive orders within a few minutes, making grocery shopping seamless.
Blinkit has begun selling home appliances, puja essentials, Eid special offerings like prayer mats, thobe kurte, ‘sehri’ and ‘iftar’ needs, ‘Holi’ needs, sweets, colors, thandai, bakery items, meats, seafood, cosmetics, mobiles and accessories, electronics, baby care products and much more.
Swiggy and Zomato
While primarily known for their food delivery services, Swiggy and Zomato have also entered the quick commerce space by offering delivery of groceries, medicines, and other essential items.
Zepto
Zepto is also the name of a quick commerce platform that enables businesses to offer fast delivery services for groceries, bakery products, kitchen essentials, paan corner (betel leaf), tobacco, health and hygiene, toiletries, clothing, and other essentials. Zepto provides tools and infrastructure to facilitate within minutes delivery of goods to customers' doorsteps.
Dunzo
Dunzo has become synonymous with hyperlocal delivery, with its Daily service taking it a step further by guaranteeing delivery within 19 minutes. From groceries to medicines to food from nearby localities to letters to clothes from the nearest boutique, Dunzo Daily fulfills all your daily needs with lightning speed.
While Flipkart maintains a strong foothold in the market, achieving revenue growth poses a continual challenge. With the emergence of competitors such as Zepto and Blinkit, there is a critical need for Flipkart to establish itself within the quick commerce sector.
As per media reports, Flipkart is also weighing options to expand into quick commerce with the introduction of dark stores. Dark stores are like mini warehouses designed for online orders.
Flipkart is also planning to buy Dunzo Daily. Despite having raised approximately USD 500 million in funding, Dunzo has struggled to secure additional investment and meet its staff payroll.
The hyperlocal delivery company has lost ground to newer competitors like Zepto, Swiggy, and Zomato's Blinkit, leading to a drop in its market position.
Flipkart, valued at over USD 32 billion, is considering buying Dunzo, known for its local delivery skills. This move could be smart, but talks might take a while because Dunzo has ties to Reliance Retail, its main investor owning a 26% share.
Flipkart wants to be careful about what it buys, especially considering Dunzo's connections, according to an article published by Business Insights Now on February 23.
Tripti Agarwal
Future Prospects
The prospects of quick commerce, including Flipkart's role, are exceptionally promising, driven by evolving consumer preferences, technological advancements, and market dynamics.
Flipkart, along with other quick commerce platforms, will capitalize on increasing smartphone penetration, internet connectivity, and digital payment systems to broaden its reach across diverse demographics and geographic regions.
By 2028, it is anticipated that the number of users in the quick commerce market in India will reach 56.4 million users. The user penetration rate, which currently stands at 1.8% in 2024, is projected to rise to 3.8% by 2028.
Meanwhile, the quick commerce market in India is anticipated to reach a revenue of USD 3.3 billion in 2024, with a projected compound annual growth rate (CAGR 2024-2028) of 27.42%. This growth trajectory is expected to propel the market volume to USD 8.8 billion by 2028.
Conclusion
In summary, Flipkart's expansion of its same-day delivery service epitomizes its dedication to setting new benchmarks of excellence in the eCommerce arena.
With a focus on speed, convenience, and customer satisfaction, Flipkart reaffirms its position as a trailblazer in India's digital commerce revolution.
As the quick commerce market continues to evolve and expand, Flipkart's strategic initiatives and dedication to customer satisfaction will shape its trajectory in the years to come.
The future holds endless possibilities, and Flipkart stands ready to embrace the opportunities that lie ahead, driving forward the evolution of online retail.
“Many believe Amazon and Walmart-owned Flipkart will continue to dominate the future of Indian eCommerce. In my humble opinion, I would not bet against the hometown teams at Zepto and Zomato,” said a LinkedIn post by Paul Hudson, Founder and CIO, of Glade Brook Capital.
Glade Brook Capital, which supported Zepto in Mumbai last year, also invested in Zomato's parent company, Blinkit, back in 2019.
FAQs
In how many cities will Flipkart provide the same-day delivery service?
Flipkart will provide same-day delivery service in 20 major Indian cities including Ahmedabad, Bangalore, Bhubaneshwar, Coimbatore, Chennai, Delhi, Guwahati, Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Lucknow, Mumbai, Nagpur, Pune, Patna, Raipur, Siliguri and Vijayawada.
What will be the revenue of the quick commerce market in India in 2024?
The quick commerce market in India is anticipated to reach a revenue of USD 3.3 billion in 2024, with a projected compound annual growth rate (CAGR 2024-2028) of 27.42%. This growth trajectory is expected to propel the market volume to USD 8.8 billion by 2028.
Who are the competitors of Flipkart in the field of quick commerce?
The competitors of Flipkart in quick commerce include Dunzo, Amazon India, Reliance Retail, BigBasket, Blinkit, Zepto, Zomato, and Swiggy.
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