Flikart’s entry into the quick commerce space may trigger a price war among incumbents Blinkit, Swiggy Instamart and Zepto with the Walmart-owned ecommerce major making an aggressive discounting play
Analysts at UBS Research said product prices on Flipkart Minutes are 10% lower while noting that it could be an initial market entry strategy
The quick commerce war is set to further intensify with Ola looking to cash in on the $5 Bn opportunity by automating dark store operations
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Quick commerce players like Blinkit, Zepto and Swiggy Instamart face an uphill battle as pricing war intensifies with the new entrant Flipkart, which launched its quick delivery service Flipkart Minutes earlier this month, in the lead.
“Prices on Flipkart were around 10% lower…..While the lower pricing could be an initial market entry strategy, we will keep an eye on prices as Flipkart expands this offering,” international brokerage UBS Research said in its latest note.
A comparison of prices of a sample list of products across Flipkart and Blinkit showed a price difference of as much as 24% on items such as Britannia Milk Bread.
Further, while Blinkit charges a delivery fee of INR 16, as well as handling fees of INR 4 for an order of INR 1,205, Flipkart Minutes offers free delivery on orders above INR 99 while levying a platform fee of INR 5.
The competition in the quick commerce space is set to heat up further with the Bhavish Aggarwal-led Ola looking to cash in on the $5 Bn opportunity by automating dark store operations.
During the Ola Sankalp 2024 event, company founder Bhavish Aggarwal said, “We have built tech that makes warehousing completely automated…(it will) completely change the state of warehousing with robot-first warehousing.”
With 10-minute delivery becoming the new normal, dark stores have become an integral part of the functioning of quick commerce platforms such as Blinkit, Zepto and Swiggy Instamart. And after two failed attempts at grocery delivery, Flipkart, too, has gone the dark store-route this time in a departure from fulfillment centres.
That Blinkit is indispensable for Zomato’s growth became evident from the foodtech major’s June quarter results. Blinkit, which currently operates 639 dark stores across the country, aims to scale this number up to 2,000 by the end of 2026 while remaining profitable.
Zepto, too, has been growing at a staggering rate. In June, it bagged a funding of $665 Mn from a clutch of investors such as Glade Brook, Nexus, and StepStone and Lightspeed. The funding is particularly significant, as Zepto aims to double its dark store count to more than 700 by March 2025.
Swiggy’s Instamart is also expanding its network in the run up to its IPO and has strengthened its quick commerce play in recent months, where it has seen a significant growth in revenue.
While Flipkart is still in infancy when it comes to quick commerce service, but its large customer base and discounted prices may work in its favour, helping it eat into the market share of big players like Blinkit and Swiggy Instamart.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.