Quick Commerce Platforms Expand Into Smaller Cities Ahead Of The Festive Season

Flush with funds and rising demand, India’s quick commerce sector is witnessing exponential growth. While Zepto, Blinkit, and Swiggy Instamart have established themselves in the segment, the likes of Flipkart Minutes, JioMart, and BigBasket are looking to unthrone these players.

As quick commerce is taking up increasing space in online shopping, the players in the segment are expected to see a big uptick in sales in the upcoming festive season. To make the most of this demand and protect their turf amid the intensifying competition, the likes of Zepto, Swiggy Instamart and Blinkit are expanding to newer cities ahead of the festive season.

Expansion In New Cities

Swiggy Instamart, one of the first movers in the quick commerce space, introduced its service in five new cities a few days ago – Udaipur, Warangal, Salem, Amritsar, and Kanpur.

Its archrival, Zomato’s quick commerce arm Blinkit, has also begun expanding into smaller cities. Earlier this month, Blinkit went live in Kochi just ahead of Onam. It also launched its services in Bathinda, Haridwar, and Vijayawada.

Blinkit seems to be banking on quickly gaining traction in the new cities by onboarding local brands. In Kochi, it onboarded Milma Milk, Ajmi Puttu Podi, and Eastern Masalas, while in Vijayawada it brought brands like Vijaya Milk and Sri Lalitha on the platform.

Meanwhile, Zepto announced plans to launch dark stores in smaller cities like Ahmedabad, Kanpur, and Chandigarh, just days after the company raised $340 Mn at a valuation of $5 Bn.

These players are not only launching in new cities but also opening multiple dark stores in the new cities to expand quickly, according to the executives of some of these quick commerce platforms.

However, it remains to be seen if they can scale up revenue in these cities in the way they did in metro cities. Lower population density, smaller order sizes, less frequent customer purchases, and supply chain difficulties are some of the challenges which they are likely to face in Tier II cities.

Additionally, many non-digital native consumers prefer the in-person shopping experience, making local grocery stores their preferred option over online platforms.

For now, these platforms seem to be looking at the festive season to help them get started in the new cities.

Quick Commerce Platforms Start Seeing Festive Surge

The rise in demand for quick commerce has meant that the players are running marketing campaigns and special advertisements for every festival, including regional ones. This move seems to be paying dividends as they have been able to corner a share in purchases related to almost all festivals.

For instance, Blinkit, Swiggy Instamart, and Zepto reported a significant surge in demand for items like rakhis, sweets, snacks, gifts, and other festive essentials on Raksha Bandhan this year.

Giving an update about the increase in demand on Raksha Bandhan, Blinkit founder and CEO Albinder Dhindsa said in a social media post, “We’ll cross all-time high orders in a day on Blinkit in a couple of minutes. We also hit the highest ever OPM (Orders per minute), GMV, chocolate sales, and most other metrics today!”

Instamart claimed to have seen a fivefold increase in Rakhi orders compared to last year.

Similarly, on Ganesha Chaturthi this year, these platforms have a dedicated section for pooja items, decorations, prasad, and gifts. They even sold Ganesha idols as part of their offerings.

A day before Ganesh Chaturthi, Zepto cofounder Aadit Palicha said in a post that the platform had delivered over 4,000 Ganesh idols. Besides, 530 modak molds were being sold per hour on Zepto, surpassing the sale of ready-made modaks, which sold at 450 per hour.

Quick Commerce Giants To Hit $10 Bn GMV

As quick commerce players expand to newer cities, their sales are expected to get a further push. Brokerage firm CLSA expects the gross order value of Blinkit, Zepto, and Swiggy Instamart to reach $10 Bn by the financial year 2025-26 (FY26).

“We expect Zomato’s Blinkit, Zepto, and Swiggy Instamart — the top three quick commerce players — to reach $10 Bn in gross order value by FY26 and surpass $78 Bn within a decade,” CLSA said in a recent note.

Blinkit is poised to benefit the most from the quick commerce boom, with its EBITDA and net profit expected to turn positive by FY25.

CLSA highlighted that Zomato will be the largest listed beneficiary in the quick commerce space, while flagging substantial risks for FMCG giants like Marico and Hindustan Unilever, as their distribution advantage erodes.

According to CLSA analysts, Blinkit, Zepto, and Swiggy Instamart collectively hold more than 90% of the market share by revenue, with smaller contributions from Big Basket’s BBNow and Flipkart.

Meanwhile, Flipkart Minutes has reportedly gone live in Gurugram after launching its services in parts of Bengaluru last month.

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