Flipkart was planning to operate around 100 fulfilment centres to support its efforts towards quick commerce play.
4 min read Last Updated : Aug 05 2024 | 10:42 PM IST
Walmart-owned e-commerce firm Flipkart has entered the quick-commerce race with a service called Minutes. The 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 has been planning to enter the 10-minute delivery service space for the past few months.
The service has been launched across areas such as HSR Layout, Gunjur, Bellandur, and Kadubeesanahalli. These are popular residential and IT hubs witnessing huge demand for quick commerce services. Flipkart is delivering electronics, smartphones, and other items within 10-15 minutes.
“The service has gone live in select parts of Bengaluru,” said a person familiar with the matter. “The idea is to keep perfecting it first and then expand.”
Flipkart was planning to operate around 100 fulfilment centres to support its efforts towards quick commerce play during the festive season this year, according to sources.
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.
Flipkart has already introduced same-day delivery of products across multiple categories. This move will enable the Bengaluru-based company to deliver products to millions of customers across 20 cities, including both metro and non-metro regions.
Some of the non-metro cities include Bhubaneswar, Coimbatore, Guwahati, Indore, Jaipur, Ludhiana, Nagpur, Patna, Raipur, Siliguri, and Vijayawada. The firm is scaling this up to cover more cities, including Tier-II and Tier-III locations and categories. However, the quick-commerce initiative is different from this service as the aim is to provide the products much faster.
Hari Kumar G, vice president and head of grocery at Flipkart, recently said that the company is deepening the reach of its grocery services in metros and expanding in Tier-2+ towns across Bharat. Kumar said both quick-commerce and next-day delivery models can co-exist. However, the company is also exploring providing quick-commerce services in the future based on the demand it witnesses in certain locations in the country.
This year tech major Google invested nearly $350 million in Flipkart for a minority share, according to sources. The investment is part of the $1 billion funding round started by Flipkart in 2023. This fundraise will give enough firepower to Flipkart to counter competition from Amazon, Reliance JioMart, and Tata Digital, as well as quick commerce players such as Blinkit, Zepto, and Swiggy’s Instamart.
Zomato-owned quick commerce firm 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, the company’s CEO Albinder Dhindsa said recently.
The company has been expanding its dark store network at a rapid pace over the last few quarters. Blinkit added 113 stores in the first quarter (Q1) of the ongoing financial year (FY25), up from 526 in the previous quarter.
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.
Another firm, Zepto, plans to double the dark store network to 700 by March 2025. It recently raised $665 million in a funding round that doubled its valuation to $3.6 billion and marks one of the largest financings in quick commerce this year.
First Published: Aug 05 2024 | 10:42 PM IST
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