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Quick Commerce Picks Up Speed Indicating a New Type of Competition

CIO Insider Team | Tuesday, 3 September, 2024
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Quick commerce is booming, and with businesses eager to expand their operations after recent fundraising rounds, indicating that a new kind of competition is emerging on two fronts.

The rush to create dark storefronts is matched by a race to fill positions to manage the growing supply chain and infrastructure.

Dark stores are commonly seen to be around 2,500–3,000 square feet in size and are located in abandoned buildings or closed businesses. This allows businesses the opportunity to reach out to remote sections of cities and even semi-urban areas while also saving money.

Additionally dark stores are believed to be hard to be found and it's unlikely to have its front doors open for you to view or stroll within. The only method to identify the existence of a dark store in a neighborhood is to see delivery personnel standing by to take orders.

“All platforms are in a land-grab mode as they look to almost double their dark store count in the coming years,” BofA Securities said.

The rental cost of these commercial buildings in key areas is higher than that of the warehouses that e-commerce giants like Amazon and Flipkart operate outside of city borders.

It’s a geography-specific issue,” said Palicha. “Deals will be aggressive for getting dark stores in, say, south Mumbai or Koramangala in Bangalore. (But) adding new stores in markets like Panvel (or) Chandigarh has been easy.”

Delivering orders in 15–30 minutes requires acquiring dark establishments and overseeing daily operations.

The rush to create dark storefronts is matched by a race to fill positions to manage the growing supply chain and infrastructure.

In addition to Zepto, Zomato-owned Blinkit has begun to grow into smaller cities. In the past few weeks, it has reached Bathinda in Punjab, Haridwar in Uttarakhand, and Vijayawada in Andhra Pradesh.

Zepto was the first to deliver, doing so in a quick 6.35 minutes. Zepto offers free delivery, therefore at Rs 150, it was also the least expensive option. Blinkit was the next to arrive, and since our item was worth more than Rs 149, they delivered it for free in roughly ten minutes. If not, there would have been a delivery fee of roughly Rs 20. Instamart completed the last delivery in 14 minutes, and there was an additional rapid delivery charge of roughly Rs 35.

According to a report by BofA Securities, rapid commerce platforms are expanding stock-keeping units, or different items at the dark stores, from 4,000–5,000 to 10,000–25,000 in order to accommodate the growing consumer demand.

Having entered the market with Minutes, Flipkart has hired from a variety of firms, including Tata-backed BigBasket, which is likewise transitioning to a fully quick-delivery strategy.



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