The unstoppable rise of quick commerce: How Blinkit, Zepto, and Swiggy Instamart are dominating the market

Just around four years ago, the term quick commerce was unheard of, and consumers were content with their local kirana stores or the scheduled grocery delivery services provided by e-commerce giants and then-grocery players like Grofers (now Blinkit) and bigbasket.

However, driven by the Covid-19 pandemic-induced lockdowns and a shift towards instant gratification, quick commerce with its promise of 10-minute deliveries has seen rapid growth. It has skyrocketed from a gross merchandise value (GMV) of a mere $0.10 billion in FY20 to an impressive $3.3 billion in FY24, per advisory firm Redseer. And that’s just the start. The total addressable market for quick commerce is $45 billion, according to investment banking firm JM Financial.

That potential hasn’t gone unnoticed. Investors are flocking to this space, pouring in big money. Zepto raised $665 million in one of the largest rounds this year; Zomato pumped Rs 300 crore into Blinkit; and Swiggy, which has a quick commerce service called Instamart, is readying for an initial public offering (IPO). These companies are not only eyeing big money but are also in close competition in the 10-minute delivery race. In fact, firms such as Reliance Retail’s JioMart and Walmart-owned Flipkart also have their sights set on the space. There’s also bigbasket’s bb now, which was a late entrant to quick commerce despite being a pioneer in the slotted same-day grocery delivery service.

“We don’t concern ourselves with competition. We want to do better not just with every single transaction but also [with] every interaction on our platforms”

AADIT PALICHA Co-Founder & CEO Zepto

Keshav Reddy, Founder of Equal, which helps Indians share identity documents with businesses to avail of services, says quick commerce is the big winner this year. “There are three big players, raising significant amounts of capital and all of them are doing really well,” says Reddy, whose family is the promoter of the GVK conglomerate.

Armed with funds and buoyed by customer enthusiasm, these firms are expanding the scope of quick commerce, moving beyond groceries and essentials to consumer durables, gadgets and a whole lot more.

The Rise and Rise

How did this segment gain such momentum? The Indian quick commerce landscape contrasts sharply with the situation in the US, where companies like DoorDash and Instacart have struggled with quick delivery, says Rahul Taneja, Partner at Lightspeed India, the Indian arm of global venture capital firm Lightspeed Venture Partners. Taneja focusses on seed stage-, early stage-, and growth stage investments. Closer to home, similar ventures like Indonesia’s Dropezy and Bananas either shut shop or shifted to other models.

Of course, there were bumps along the road in India, too. Questions were raised about whether it could be economically viable in the long run or if it was just the early adoption of a new proposition with no lasting impact on consumer habits. “Over time, however, each player has cultivated a sizeable and loyal audience, [which is] consistently rewarding these platforms with frequent purchases,” says Taneja.

When Grofers, an on-demand grocery delivery service, began operations in 2013, experts speculated that it was ahead of its time, perhaps too far ahead. It was believed that Indians preferred to stroll through their neighbourhoods to buy essentials rather than use an app. But then Grofers expanded to multiple cities, though it had to shut down some operations in 2019. Enter the pandemic, and everything changed. It was an inflection point. Rebranded as Blinkit, it introduced the first-of-its-kind 10-minute delivery service, sparking customer interest and proving the sceptics wrong. That set the stage for the company’s rapid growth. In 2022, food delivery platform Zomato acquired it for Rs 4,447 crore in an all-stock deal.

K. Ganesh, a serial entrepreneur and Founder of bigbasket, says the adoption, scaling up, and growth of quick commerce have caught everyone by surprise. He calls it one of the most significant developments in the e-commerce space. Tata Digital bought a majority stake in bigbasket in 2021.

Ganesh says the impact of quick commerce is clear if one considers the change it has brought about in customer behaviour. For a typical middle-class household, even in urban areas, there are three kinds of purchases: planned, top-up or essential, and instant purchases. Monthly planned purchases account for 80% of spends, top-ups are somewhere between 10% and 12%, and instant purchases account for 5–6%. Now, Ganesh says, top-ups have started attracting a higher wallet or market share, and they’re eating into planned purchases. “Customers love the quick delivery concept.”

Customers took to quick commerce so much that they started relying on it even for orders they previously scheduled for slotted delivery. That raised a critical question: if you can receive your order in 20 minutes, why wait for a scheduled slot?

“Blinkit will be larger than Zomato in one-tenth the time. The scale it brings to the table is huge. Blinkit was about wanting something quickly”

DEEPINDER GOYAL Co-Founder and CEO Zomato

Because of the enthusiastic adoption from customers, quick commerce firms are increasing their presence at a rapid pace. Zepto operates in seven cities, Blinkit in 26 cities, and Swiggy Instamart in over 30 cities. Blinkit is also making significant inroads into Tier II and III cities.

According to Aadit Palicha, Co-founder and CEO of Zepto, with the latest fundraise, the company is looking to expand into 10 new cities, including Ahmedabad, Chandigarh, Jaipur, and Coimbatore. Company insiders say Zepto is aggressively expanding into Tier II towns.

Zomato Co-founder and CEO Deepinder Goyal told BT recently that the 10-minute concept is magical, and he’s very bullish on Blinkit. “Blinkit will be larger than Zomato in one-tenth the time. The scale it brings to the table is huge,” he said.

Phani Kishan Addepalli, CEO of Swiggy Instamart, says quick commerce is one of India’s largest consumer categories, growing at a high double-digit rate. “Similar to the ease we introduced in food delivery, we recognise that consumers seek convenience in various facets of their lives,” he says. He adds that the firm is seeing good traction in both metros and non-metros, is operational in over 25 cities, and has witnessed notable growth in cities like Jaipur, Chandigarh, Visakhapatnam, and Kochi. “On average, these cities have more than doubled in the last 12 months, and we expect to see strong growth as we are just getting started,” he says.

However, these firms are also finding that some places aren’t working out for quick commerce.

That’s part of doing business, Taneja says. According to a leading investor, who did not wish to be named, the food delivery business faced a similar situation seven to eight years ago. Companies didn’t initially know which cities would be profitable, leading to rapid and expansive growth, followed by closures in less viable locations. “I remember some had shut down operations in around 200 cities,” the investor recalls. Quick commerce is expected to follow a similar trajectory.

Taneja says there is a significant opportunity for profitability in India’s top cities, though success depends on each individual business. “There is a vast market available in the Top 15 cities where you can build a substantial business presence,” he says. Taneja, as part of Lightspeed, is also an investor at Zepto.

The promise of quick commerce is its projected growth, says Kushal Bhatnagar, Associate Partner at Redseer. Historically, some trends surge and then stabilise, but quick commerce is expected to maintain a 70–80% growth rate over the next two years, he says. No wonder, then, that the major players are looking to expand dark stores and user base.

“Consumers have been ordering everything from gold coins during the festive season to air purifiers, headphones, toys and more from Swiggy Instamart”

PHANI KISHAN ADDEPALLI CEO Swiggy Instamart  

Going Dark

Dark stores are the backbone of quick commerce. These strategically located hubs, often found in commercial or industrial areas, serve neighbourhoods within a 2-km radius, ensuring rapid delivery.

Each platform relies on a robust network of these dark stores, supported by at least one large warehouse—dubbed the mother warehouse—on a city’s outskirts that holds a larger inventory of about 100,000–200,000 stockkeeping units (SKUs). This central hub manages all procurement from brands and distributors before distributing inventory to the network of 30–40 dark stores within the city. The dark stores stock about 6,000 SKUs, offering a diverse range of products.

“Here, the data that these companies have plays a very important role,” Ganesh highlights, explaining that each locality has different demands and the stock is distributed accordingly.

According to a report by JM Financial, dark store operations are powered by advanced tech that optimises inventory, product placement, replenishment, quality control, and delivery logistics. When an order is placed, a picker is alerted immediately via a handheld device that guides them to the correct shelves. With an average order containing six SKUs, the picker can collect, scan, and pack the items within 1.5 minutes. Simultaneously, a delivery partner is notified and is ready to dispatch the order as soon as it’s packed, ensuring quick delivery and satisfied customers.

Blinkit leads the pack with 526 dark stores nationwide, establishing itself as a clear frontrunner. Swiggy, with approximately 500 dark stores, is making significant strides with its Instamart service. Meanwhile, Zepto, with 350 dark stores, is the dark horse in this race, achieving remarkable success despite lacking legacy backing. And they’re aggressively expanding further. Palicha says Zepto will increase the store count to 700 by March 2025, and Blinkit CEO Albinder Dhindsa has said that the aim is to get to 1,000 stores by then.

Even bb now has opened around 400 stores. Ganesh says that even though bigbasket and other sizeable players like Flipkart—which is yet to announce its quick delivery platform—aren’t native to this segment, they will be able to thrive in the space.

The Next Jump

Groceries were just the start. Quick commerce players are now expanding into electronics, fashion, toys, printing services, and more, indicating a shift towards a comprehensive retail strategy.

Swiggy Instamart recently partnered with Hamleys, the British toy retailer owned by Reliance Retail, to offer a diverse range of toys to be delivered in the 10-minute window. “Swiggy Instamart has now expanded its product selection and assortment to more than 10,000 products, particularly in categories like toys, beauty, electronics, and home & kitchen. Consumers have been ordering everything from gold coins during the festive season to air purifiers, headphones, toys, and more from Swiggy Instamart,” says Addepalli.

Meanwhile, Zepto introduced Zepto Café in select cities and neighbourhoods for swift delivery of snacks and bakery items. And Blinkit has entered the market for high-demand electronics items such as Sony’s PlayStation 5 gaming console. It has also ventured into the sale of air coolers and fans in some urban centres, the delivery of gold coins during the festive season, Valentine’s Day gifts, and jersey sales during cricket matches.

“India has got a large organised retail available; if you marry that with quick commerce, the customer will come”

K. GANESH Serial Entrepreneur

As quick commerce continues to diversify and innovate, it poses intriguing questions about the future landscape of retail and consumer behaviour. Bhatnagar of Redseer notes that in FY24, while e-commerce experienced 12% growth, the quick commerce sector surged dramatically, growing by 75-80%, albeit on a lower base. E-commerce GMV was $60 billion in FY23, according to India Brand Equity Foundation.

“India has got a large organised retail available; if you marry that with quick commerce, the customer will come,” Ganesh says. He cites the example of bigbasket, in which the Tata group has a 66% stake. It has the benefit of having access to consumer electronics retail chain Croma, which is also a part of the Tata group, so it can deliver washing machines and other consumer durables in 20–30 minutes. The hyperlocal data and strength in logistics are big plays here, Ganesh adds.

Amazon and Walmart-backed Flipkart, the leading e-commerce players in India, have an advantage, but they have to play catch-up in quick commerce. Flipkart is trying to make a comeback in this space; this will be its third attempt. Reports have also said that Amazon has approached Swiggy for a deal related to Instamart.

Taneja of Lightspeed India says e-commerce and quick commerce cannot be compared, as both would coexist. “You see, when e-commerce came, people were scared that kiranas (neighbourhood grocery stores) would shut. Did that happen? Similarly, e-commerce and quick commerce have a lot of headroom to grow. These are different shopping trips.”

It’s not just goods deliveries that are fast with quick commerce firms. They’re also looking to achieve profitability in a surprisingly short time. Blinkit, for instance, became adjusted Ebitda profitable in March 2024, according to Dhindsa in a letter to shareholders. Zepto’s Palicha reports that 75% of their 350 dark stores are cash flow positive, with newer stores becoming profitable in about six months, compared to 23 months initially. Swiggy, which launched its quick commerce business Instamart in 2020, grew 30x in two years and achieved Ebitda profitability in nine years, as stated in the company’s 2023 annual report.

The secret behind this success is minimal inventory build-up. But, of course, some caution is warranted. Palicha says it’s premature to predict if quick commerce will completely overshadow traditional e-commerce in the near future. “The coexistence and potential synergies between these models are more likely than one entirely displacing the other in the foreseeable future.”

“Over time, each player has cultivated a sizeable and loyal audience, [who are] consistently rewarding these platforms with frequent purchases”

RAHUL TANEJA Partner Lightspeed India  

What Now?

Investors and industry insiders have very strong views on who is leading in the quick commerce race. Blinkit stands out for its extensive category offerings, Zepto excels in rapid delivery, and Swiggy skillfully balances both, they say. But the question remains: who is leading the race? According to a shareholder letter, Blinkit’s average delivery time is 12.5 minutes. Zepto, on the other hand, claims a swift 10-minute average, while Swiggy boasts an average of under 20 minutes, according to a blog posted on its website. Clearly, Blinkit dominates with its vast selection and SKUs, but Zepto is setting the pace in the ultra-fast delivery game.

According to financial reports, Zepto’s consolidated operating revenue for FY23 was Rs 2,024 crore. Blinkit reported Rs 2,302 crore in FY24, turning Ebitda positive. Swiggy does not provide data separately for Instamart.

The headroom for growth of the quick commerce players is big, but Bhatnagar says that after a few years, these players have to craft a different playbook to penetrate deeper into Tier III towns.

According to Redseer, this aggressive growth spree is expected to continue for the next couple of years, which will see quick commerce reach around 20 million monthly transacting users (MTUs) by FY26. After this, user growth and, hence, market growth are expected to stabilise a bit, as indicated by the correction in food delivery growth beyond the 20 million MTU mark.

That growth is attracting more competitors. And each player is carving out a niche in this high-stakes industry. That’s good news for customers.

@PalakAgarwal64