Quick Commerce’s 10-Minute Delivery Hits Dead End
Swiggy, Zepto, Dunzo, Blinkit, and other companies are truly embracing the notion that winning the swift commerce war doesn’t necessarily require speedy delivery.
In late 2021 and early 2022, when the demand for 10-minute delivery and swift commerce one-upmanship peaked, businesses in this field were still unable to provide a solution to the fundamental question: Was it actually required?
And, as we said several months ago, the hype is dead. Swiggy, Zepto, Dunzo, Blinkit, and other companies are truly embracing the notion that winning the war isn’t just a matter of timing the delivery. Inventory, private label, and distribution effectiveness are now the focus.
This Sunday, we assess this developing market and examine how India’s fast commerce is evolving in light of certain recent occurrences.
The changing face of instant commerce
Fast forward and break things can apply to many startups and industries, but this was most clearly demonstrated in the rapid commerce war when startups were stepping up their efforts overnight to expand and seize market share.
Instant commerce platforms have returned to reality after a ten-minute distribution frenzy and their marketing blitz with ridiculous ad settings supporting the social media game.
It was not surprising that the early conflict was fought on the marketing front given how swiftly the segment expanded – at least in metros – and the swarms of new rivals.
Zepto was the first startup to advertise 10-minute delivery, which attracted the interest of Blinkit, Swiggy, and Dunzo. While Ola has abruptly left the bandwagon, new firms like Warply, established by Grofers (Blinkit) cofounder Saurabh Kumar, have found a break from the race.
The sudden commerce closure grabbed headlines in the United States, Europe, and Asia, and this harsh truth may soon hit Indian entrepreneurs as well.
Delivery in ten minutes was never a reality. Only a small percentage of orders—even in the early going—will really be delivered in the period promised, while the majority of other orders take twice as long.
Unsurprisingly, even though the delivery riders of these companies can be seen pretty much every block, most Swiggy, Instamart, Blinkit, or Zepto deliveries in Delhi always take longer than 20 to 25 minutes.
However, the availability of the proper products at every single store accounts for the discrepancy between the estimated delivery time and the actual delivery time, not due to ineffective processes.
Models Evolve with Scale
It was a marketing ploy to delay delivery. Simply said, all of that hassle is being lessened now. Rapid commerce platforms can reach outside metro areas, according to Kabir Biswas of Dunzo, but this promise will change.
Another way to phrase this is that the quick trade will go more quickly than the options available in those locations right now.
Instant commerce models are developing more quickly than e-commerce, even in metro areas, as daily user behaviour changes. According to the founder of an Instant Commerce platform, as customers grew older and became more accustomed to these platforms, their ordering habits altered and progressively more things were added to the cart.
Orders are sent to the closest Dark store that has the right products because the exact combination of products might not be available there. Because of this, only a very limited number of product combinations may be supplied in under 15 minutes.
However, they seldom used these apps for the advertised delivery time; instead, they did it for convenience. If the correct products are available, a few-minute wait is manageable, and this is how delivery apps expect to remain despite fierce competition.
According to the founder stated above, “Like Zomato and Swiggy, most users choose the app with the highest savings, but with Instant Commerce, users choose the app with the best products for them.”
Users will make crucial transactions in a matter of minutes, therefore Zepto, Dunzo, Swiggy, and Blinkit will all be chatting on the phone simultaneously. Users will switch to the provider who has the right inventory, as they already do, so user behaviour will be crucial to study and crucial to retention.
Focus Back on Tech
The marketing and promotion spending frenzy for Quick Commerce applications has changed, though. More covert discounts are being offered for the right incentives. Additionally, for quicker fulfilment, firms like Swiggy Instamart charts charge a little shipping fee. It makes a big difference in how quickly unit semantics can be resolved.
User experience and inventory management will be the two main battlegrounds, and once more, technology may come up in the discussion rather than lofty claims. Although the marketing war is entertaining, technology is the real thing.
While inventory management may require businesses to figure out the logistics between dark storefronts in order to respond to changes in demand on the go, the user experience will depend on intelligent product suggestions and easy product discovery within the app.
Who will prevail on these fronts among Blinkit, Zepto, Swiggy, Dunzo, and other instant commerce players?
Although Blinkit’s printed delivery may not be the exact solution, it is a variation of it. Being flexible enough to recognize peaks or shifts in demand and move there is key.
Unit Economics Puzzle
Zomato has no doubts about the potential of rapid trade. In the company’s Q1 FY23 investor presentation, CFO Akshat Goyal stated, “We expect the overall client base, average order value as well as monthly order frequency to exceed food delivery.”
All players will focus their emphasis primarily on improving unit economics in order to maintain their position over the long run. According to sources, Dunzo purposely focuses on shorter trips so that it can deliver more packages each hour for its riders and distribute the cost of the driver across more orders.
In order to balance out reduced profits in some other orders, it is also moving toward group delivery at the same time. In other words, one delivery journey will cost five or six consumers.
Additionally, it can assist in making up for lower margins on other orders where consumers have received discounts or if delivery costs cannot be made up for. It remains to be seen whether this will function in various locations throughout a city.
However, that’s how quick trading works; it turns out that quick isn’t about timing but rather about how quickly things are changing.
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edited and proofread by nikita sharma