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Updated on: Thursday, January 13, 2022, 04:36 PM IST

Teji Mandi Explains: What’s happening in the quick commerce space?

Representative Pic |

Representative Pic |

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Along with the glaciers in Antarctica, things are heating up at the pretty much same pace in the Indian quick commerce space. Quick commerce is the business of delivering essentials in a time frame of 10 to 20 minutes. Significant money is being poured in companies like Zepto, Swiggy Instamart, Blinkit, and lately Dunzo. Investors in these startups are betting heavily on this space because they think it’s going to be the next big thing. Here’s a detailed account of what’s happening in this space.

How Did It Start?

The battle in the hyperlocal delivery space started at a time when Zepto, a startup engaged in online delivery of groceries in just 10 minutes, received $160 million in funding within just five months of its launch. Zepto was started by two Stanford University dropouts who left their studies to launch their startup. Such was their passion! Since then, numerous players have lined up to cater to such a huge market.

The Current Scenario

To capitalise on this opportunity, Zomato, which itself is a loss-making entity, betted heavily on this space and invested in Blinkit (previously Grofers). There are other players like Swiggy Instamart who have also started their operations in select cities. The Tata-owned Bigbasket is also expected to start its 15-30 minute delivery soon. Dunzo is the latest entrant in this space.

How Does It Affect You?

First things first, as a customer, the service might be a blessing during essential times. Although as a customer, there are a wide variety of service providers. The one with the shortest time span will ultimately win!

As an investor, there are no standalone listed companies in this space that you can bet on. But some companies have stakes in these startups. Blinkit is backed by Zomato, Dunzo is backed by Reliance Industries, and Big-basket is backed by the Tatas. For investors closely tracking this space, these are the companies to keep on their radar.

The Way Forward

Dunzo received a $240 million in funding round by Reliance Retail, and the latter will now own a 25.8% stake in the quick-delivery startup. This comes at a time when others are preparing to launch their operations in select cities. But the ones with hassle-free and the fastest delivery will ultimately win.

With the COVID-19 pandemic here to stay at least in the near future, people not preferring to step out of their houses might also consider availing these services. On the other hand, after successfully launching their operations in Indian megacities, these startups will replicate their strategies in tier-2 and tier-3 cities wherever feasible.

With competition intensifying, committing one mistake can help the competitor snatch the customer from a firm very easily. Investors are lining up with the capital to be poured in, but considering the Indian landscape, the road infrastructure, the traffic sense, these startups will have to aim for perfection to thrive in the long run!

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Published on: Thursday, January 13, 2022, 04:36 PM IST
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