The Indian e-commerce giant Flipkart is planning to enter the quick-commerce business, aimed at providing customers with the convenience of receiving their orders instantly after making their purchases, a source familiar with the matter told TechCrunch.
The firm, majorly owned by Walmart, plans to make the instant-delivery service available in select locations as early as May this year, the source said, requesting anonymity as the matter is private. The deliberations are ongoing and the timeline may slightly change, the source cautioned.
A Flipkart spokesperson said the Bengaluru-headquartered e-commerce firm is “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.”
Flipkart, valued at over $30 billion, has been steadily laying the groundwork to improve its delivery time for quite a while. It has heavily invested in its supply chain infrastructure over the years, with a particular focus on reducing delivery times for grocery items. These efforts have allowed Flipkart to offer same-day and next-day delivery options.
The new foray comes at a time when Flipkart is also exploring the possibility of acquiring the instant-delivery startup Dunzo, TechCrunch reported last month. The overarching ownership of Reliance on Dunzo has complicated the conversations, however, the report added.
Flipkart’s interest in quick-commerce coincides with the ambitious expansion plans of instant-commerce players such as Swiggy, Zepto, and Zomato’s BlinkIt. These companies are aggressively widening their product offerings, venturing beyond grocery delivery to include a diverse range of items, from daily essentials to electronic gadgets, in a bid to capture a larger slice of India’s burgeoning e-commerce pie.
“We view these potential developments as increasing the relevance of the quick commerce market and a validation that the quick commerce model is working well,” Morgan Stanley analysts wrote in a note Thursday, reacting to this TechCrunch story. “That said, we believe this market could remain relatively more competitive than food delivery.”
Quick-commerce has shifted from an “adjacent offering” to becoming a “core offering” for food delivery players, Bernstein analysts wrote in a recent note. Quick-commerce accounts for about 40% of the online grocery delivery category, the analysts said.
“Quick commerce with a potential TAM of ~$45 billion (~7% of the grocery market of $620 billion),” they wrote. “Serviceable market is metros/Tier1 cities (~17%). Mid-to-high income households (~60%) and top-up orders (~70%). We estimate quick-commerce GMV to grow to $6.2 billion by 2025.”
Indian news outlet Entrackr first reported some of the details of Flipkart’s instant commerce play Thursday.
“At Flipkart, customer-centricity is at the core of everything we do. We constantly work towards delivering a wide range of products to customers with speed,” a Flipkart spokesperson said. “Over the past few months, we have made several investments to enhance our delivery capabilities, including adding same-day delivery in 20 cities. This covers mobiles, essential items, electronics, home appliances, fashion, books and lifestyle products.”