How 10-minute delivery platforms struck a chord with young Indian consumers

New Delhi, May 10
As quick commerce (QC) companies strike a chord with consumers in the country, particularly the urban digital natives, such platforms have found good product market fit in metros and large cities and are now gradually expanding their presence in smaller cities and towns in a calibrated manner, experts said on Friday.

Currently, three major quick delivery platforms -- Zomato's Blinkit, Swiggy's Instamart and Zepto -- compete head-on with each other and the market-share gap is not so wide.

According to industry experts, such quick grocery platforms have seen limited success globally but in India, there are a couple of key variables driving their success.

"Population density and high prevalence of unorganised retail/local kirana stores enables QC companies to exercise relative buying power with scale, along with cheap labour costs," according to a report by Emkay Global Financial Services.

GenZs and millennials have started ordering everyday needs across product categories via online apps, which are delivered within minutes.

These platforms started with grocery deliveries and soon expanded their total addressable market (TAM) by entering into newer categories.

"This shift will drive frequencies, average order value (AOV), and contribution margin. Overall, the value proposition hinges on both convenience and value (better experience at cost, lower than alternatives, mainly convenience/kirana stores), which is driving more clicks and wallet share gain," according to the Emkay Global report.

Blinkit has sustained industry-leading AOV on the back of higher SKU (stock keeping unit) availability, order fulfilment rates, better customer insights, and superior execution, which also aided profitability.

According to the latest Goldman Sachs report, Blinkit has become more valuable than Zomato's core food delivery business.

Another report by market intelligence firm Redseer said the quick commerce market in India grew at 77 per cent (year-on-year) to reach $2.8 billion in gross merchandise value (GMV) last year.