As a pale of gloom shrouds the Indian startup ecosystem amid funding drought after a strong bull run, the quick commerce (10-minute delivery) segment is brewing with new hope as people prefer groceries and other home essentials at their doorsteps within no time after making an online order.
Startups like Swiggy Instamart, Zepto, and Reliance-backed Dunzo, etc are trying to defy the current slowdown, as they add more goods and daily essentials to their kitty and deliver them to their customers.
Learning from the earlier players in the quick delivery space, the startups are minimising cash burn.
India’s quick commerce market is all set to witness 15 times growth by 2025, reaching a market size of nearly $5.5 billion, according to Bengaluru-based market research firm RedSeer.
The total addressable market for quick commerce in India stands at $45 billion, and urban areas are driving this market on the back of mid-high-income households.
Swiggy Instamart pioneered quick commerce grocery delivery in India when it launched this in August 2020.
Since then, Instamart has made quick commerce more accessible and affordable to consumers across 28 cities to date.
“We are encouraged by the consumer adoption and the opportunity this category is providing for sellers, D2C brands, and FMCG brands alike as they benefit from Swiggy Instamart’s reach and superior experience,” Karthik Gurumurthy, SVP, Swiggy Instamart, told IANS.
In December 2021, Swiggy announced to pour $700 million into Instamart.
“While grocery is commonly understood to be the largest category in retail, quick commerce remains a new and largely untapped segment even within grocery,” Gurumurthy added.
Over the last two years, quick commerce has seen a significant uptake in urban areas, with major cities such as Bengaluru, Chennai, and New Delhi enjoying most of the offerings.
According to Abhishek Gupta, Engagement Manager, RedSeer, India has laid the foundation for a well-positioned market for quick commerce adoption.
“The growing online population and an increasing preference for online shopping over brick-and-mortar shopping is enabling this market to grow rapidly,” he said.
Earlier this month, 10-minute delivery platform Zepto raised $200 million, taking its valuation to around $900 million.
Just nine months after launching, Zepto posted a record 800 per cent revenue growth quarter-on-quarter.
“Our rigorous focus on Unit Economics is the main reason why we’ve had such an amazing trajectory as a company and also the reason for our investors’ continued faith in our efficient business model,” a Zepto spokesperson told IANS.
The cash burn has also “come down 5 times on a per-order basis, significantly lower than companies growing at the same pace”, the spokesperson added.
The company has a 1,000-strong workforce and plans to hire across all functions.
The platform has so far raised $360 million from investors in Silicon Valley and India. It recently clocked Series D fundraise of $200 million, bringing its valuation to $900 million.
Quick commerce is fundamentally changing consumer purchase behaviour and the grocery retail market on the whole by providing faster delivery options (in as little as 10 minutes) as well as a more convenience-driven shopping experience.
“Quick commerce is satisfying the latent needs of its customers in a way that traditional commerce never could,” said Gupta.
According to Gurumurthy, they will continue to “make online grocery shopping more delightful and convenient to users”.
(Nishant Arora can be reached at email@example.com)