Diwali Bash 2024, brought to you by Quick Commerce!

After tasting stupendous success and through the roof sales during Rakshabandhan this year, the Quick-Commerce big-wigs are now turning to Diwali 2024 to celebrate the festive season with a bang. For the first time ever, quick commerce companies like Blinkit, Swiggy Instamart and Big Basket are partnering with FMCG giants like Parle, Mondelez and ITC, according to a Economic Times report. This collaboration aims to capture a larger share of the festive gifting market.

"Quick commerce companies are seeking support from FMCG giants in terms of promotions and special packs for the festive season. They aim to compete fiercely with ecommerce platforms and modern retail this Diwali," said Krishnarao Buddha, senior category head at Parle Products, to ET. The focus is reported to be on categories such as chocolates, Indian sweets, confectionery, dry fruits, and cookies. Mondelez India has partnered with leading quick commerce companies, especially for gifting, according to Desmond D'souza, vice-president of sales. “This includes strong on-app and off-app collaborations, including digital and out-of-home, and building significant visibility on the platform,” he said. Additionally, these platforms have forged alliances with consumer electronics companies for products like kitchen appliances, personal care electronics, smartwatches, and earbuds. And to meet the increasing demand, quick commerce platforms are aiming to boost their inventory levels by up to 60% compared to 2023's festive season.

SHIFT IN CONSUMPTION PATTERN

Consumer shift to quick-commerce companies for their retail needs is the main driver for this sort of an arrangement. With urban India running short on time and looking at quick and easy access to all their needs, quick commerce platforms are doing roaring business. Accounting for almost 30-40% of their online sales, quick commerce has become a rapidly growing channel for consumer goods manufacturers.

There was ample proof of shift in customer preferences this Rakshabandhan when it rained revenue for quick commerce platforms, as India ditched exhaustive post-office shopping for quick hassle-free deliveries. Blinkit, which holds about 40% share of the quick commerce market, sold about 700 rakhis every minute. It also crossed all-time high orders in a day. “We’ve hit highest ever OPM (orders per minute), GMV, chocolate sales and most other metrics today! And at its peak – we hit 693 RPM (Rakhis per minute),” Blinkit CEO and co-founder Albinder Dhindsa wrote on X on the occasion of Raksha Bandhan.

Zepto also reported hike in sales for festive merchandise. The Mumbai-based firm introduced ‘Lifafas’ for the festival, a free add-on in Zepto orders, with “5 crores worth of prizes”, which worked in the company’s favour. “We just crossed 1 million Lifafas – what a crazy way to end a Sunday night! All-time high on orders, sales, and first-time buyers as well. The team and I couldn’t be more grateful to our customers,” Zepto CEO and Co-Founder Aadit Palicha wrote on LinkedIn on Rakhi.

Food-delivery platform Swiggy’s quick commerce arm Instamart also joined in the celebrations as it more than doubled its Rakhi sales against last year. “Celebrations of Raksha Bandhan fully underway – clocking higher orders per minute (OPM) than our peak day, which was a historical high in itself Expecting to sell as many rakhis “today” as we did “till today” this year (and that’s already 5x of last year!),” Instamart head Phani Kishangarh A, shared on X. The platform witnessed a massive 646 per cent spike in perfume orders on RakshaBandhan, making it the most popular Rakhi gift after chocolates, he added.

When asked why quick-commerce is doing so well, Bijou Kurien, Chairman of Retailers Association of India told CNBC-TV18 in an interview, “Speed fulfilment is an essential consumer requirement. And everybody looks to try and make sure that if you buy something online, you get it at your home as fast as possible. Besides groceries, if you are getting something else within half an hour, or within a couple of hours also, you still are making a difference compared to what the classical ecommerce players are currently doing.”

PHENOMENAL RISE OF QUICK-COM

The rise of quick commerce platforms has been phenomenal in the recent past. They have been expanding their rapid delivery service to various parts of the country, acquiring dark stores in huge numbers, tying up with various dealers and manufactures to make various categories of products available on their website and pumping in money in huge numbers to make it all possible.

After consumer goods and electrical appliances, even sports accessories and other retail categories are foraying into quick commerce, to ensure quick delivery to customer. Very recently, Decathlon, known international sports retailer, tied up with Zepto. So, if you desire sports accessories, you can now procure the same in 10 minutes via Zepto.

Blinkit has recently announced its availability in various cities in the country. Taking to LinkedIn, founder and CEO of Blinkit announced Blinkit’s availability in Bareilly, Kochi, Bathinda, Haridwar, Vijayawada within a span of two weeks. The plan is to add more cities in the near future and take the number of dark stores to 2,000 by the end of 2026 from 639 at the end of the June quarter of this fiscal. "As of now, we see a line of sight of getting to about 2,000 stores for our current business. Most of these stores would be in top 10 cities in India. Beyond the large cities, the size of the market is still undiscovered. If everything goes as planned (which usually doesn’t), we plan to get to 2,000 stores, latest by the end of 2026 while remaining profitable," Blinkit CEO Albinder Dhindsa said in a note recently. Online food delivery major Zomato-controlled Blinkit achieved impressive financial performance in the first quarter of the fiscal year 2025, as per reports. Blinkit’s revenue increased significantly by 22% quarter-on-quarter, reaching Rs 942 crore. Furthermore, the Gross Order Value (GOV) experienced substantial growth, rising by 130% year-on-year and 22% quarter-on-quarter to Rs 4,923 crore. Zomato had acquired Blinkit for $568 million in 2022. 

"We have been focused from the beginning to increase the selection for our customers and offer it in the most efficient way to them. This has meant that the average selection available to customers in any neighbourhood has increased between 4-5x over the last eight quarters - we are now able to offer up to 25,000 unique SKUs to our customers in some locations. A large part of this expansion in selection has happened outside of the traditional grocery segments of FMCG, fruits & vegetables and staples. Over the last six quarters, we have launched and scaled products in electronics, beauty & make-up, pet care, and toys & games and we will continue to invest behind opportunities in newer categories as well," Blinkit CEO Albinder Dhindsa said in a note. 

Earlier this year, Zomato announced its decision to infuse Rs 300 crore into Blinkit, as per regulatory filings made with the Registrar of Companies (RoC). With this, Gurgaon based Zomato has infused nearly Rs 2,300 crore since acquiring Blinkit in August 2022. Zomato acquired Blinkit, formerly known as Grofers, in an all-stock deal for Rs 4,477 crore.

Blinkit’s competitor Zepto too, has been raising investment in huge numbers to deal with competition. Zepto raised $340 million in August this year in a follow-on financing round at a valuation of $5 billion as it gears up for an initial public offering (IPO). The latest funding round was spearheaded by General Catalyst, with new investors Dragon Fund and Epiq Capital joining in. This was Zepto’s third big-ticket fundraise within a year and underscores the high demand for services that deliver essentials within minutes. With this, the company has already raised more than $1 billion in 12 months. Reuters quoted Zepto Co-Founder and CEO Aadit Palicha saying that the company would use the funds to double the count of its dark stores, or warehouses located in high-demand neighborhoods that ship goods, to over 700 by March 2025. The company's gross merchandise value, or the value of total transactions through the platform, has "multiplied year-on-year to a base of $1 billion+" and over 75% of its dark stores are profitable at a core operating level, he said earlier. Founded in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto is India’s fastest growing e-grocery company valued at $1.4 billion. Headquartered in Mumbai, Zepto is present across 10 major cities in the country and delivers 5000+ products within 10 minutes.

With needs and desires being delivered in no time and at one’s doorstep, quick commerce platforms are the new age ‘genie’ that are bound to grow and capture a sizable part of the market. According to a Goldman Sachs April 2024 report, quick deliveries account for $5 billion, or 45% of India's $11 billion online grocery market and are set to expand to $60 billion, or 70% by 2030. However, it remains to be seen if this is a sustainable rise and what it means for e-commerce and traditional retail practices.