The country’s leading ecommerce platform plans to scale up the 45-minute grocery delivery service known as Flipkart Quick to more cities next month, a company insider said.
Flipkart declined to comment.
The development comes at a time when quick commerce firms such as Blinkit, Zepto, Swiggy’s Instamart and RIL-backed Dunzo are jostling to deliver a range of products within 15-20 minutes.
Flipkart’s new service is in line with the company’s thinking that 10-20 minutes delivery is not the right long-term customer model.
“We would look at a more sustainable business which offers it (delivery) in 30-45 minutes with good value and selection,” Flipkart group CEO Kalyan Krishnamurthy had told ET on January 4. “That is the way we look at the convenience business, rather than force-fitting a consumer need which is actually not there in the market.”
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He had said the company would like to focus on a model that’s sustainable and offers both good value and selection.
Quick commerce companies like Swiggy’s Instamart and Zepto operate dark stores to facilitate delivery of groceries in 15-20 minutes. These dark stores would typically have a stock-keeping-unit (SKU) of 1,000-3,000 products per store.
Flipkart will have wider selection since the company takes longer time to deliver, the source cited above said.
The company is not overhauling its 90-minute delivery model, but is just “optimising the steps” to reduce delivery timeline, the person said.
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Flipkart Quick, which was launched as a 90-minute delivery service, is present across 14 cities and the company plans to take it to over 200 cities by 2022.
Flipkart will also look to expand its fresh vegetable and fruits business under the broader grocery category. The service is currently available in Bengaluru and Hyderabad.
According to a report by Bernstein Research, India is leading other global markets in terms of quick commerce adoption. Quick commerce penetration as a percentage of online grocery is 13% in the country, while China is at 7% and Europe is at 3%. Quick commerce targets mid/high-income households in large metros who seek convenience over price.
But players across the sector are at the moment burning capital with no profit in sight.
ET had reported on Monday that Swiggy’s Instamart and Mumbai-based Zepto are looking to launch private label products soon to improve margins and reduce burn.
Private label products are goods sold by retailers under their own brand names. Many brick-and-mortar retailers and ecommerce companies have private labels, which offer a fatter margin than selling third-party brands. Amazon, for instance, sells many products under the Amazon Basics brand.
Zomato, which invested $100 million in Blinkit (formerly Grofers) last year, on February 10 reiterated its focus on the quick-commerce segment by announcing it would invest an additional $400 million in the space in the next two years.
ET reported on November 18 that Zomato was looking to bet $500 million on Blinkit. Meanwhile, Swiggy has allocated $700 million to grow its Instamart offering, while Zepto raised a war chest of $160 million last year.
