Who wants groceries in 10 minutes?
Until early last year, many folks I spoke with working at India's biggest e-commerce companies, including Flipkart and Amazon, sounded sceptical about quick-commerce. "It's just a fad and will die after Series A and B funding rounds."
However, Zepto has raised over a billion dollars over the past few months. Reliance-owned JioMart Express is looking to offer a 30-minute delivery soon, and Big Basket has pivoted completely to quick-commerce. India is also the first market in the world where Amazon will launch its quick-commerce.
It's impossible not to wonder how Amazon and Flipkart, two of India's biggest e-commerce companies, had opportunities to acquire Zepto, but they failed to seize the moment. Over the past few months, I've spoken with executives from both companies, and they pointed out how Amazon and Flipkart hesitated to bet on the quick-commerce frenzy.
It seems Amazon was wary of committing to Zepto's "cash-hungry" business model. "We still wonder if we missed the boat," one insider told me.
On the other hand, Flipkart engaged in serious discussions about a strategic buyout, even considering taking an equity stake. But they didn't move quickly enough. "Talks eventually fell through," a source familiar with the matter said. It's a missed chance for both companies, and Zepto has since moved forward, closing the door on any new acquisition talks.
With India's young and middle-class shoppers expecting everything - from groceries to electronics - delivered in under 10 minutes, quick-commerce has gone mainstream. Zepto, Blinkit, and other fast-movers have capitalised on this consumer behaviour shift.
A Market In Land Grab Mode
In a recent report, BofA Global Research describes India's quick-commerce market as being in "land grab mode". Dark stores are expanding at a breakneck pace, and companies like Zepto and Blinkit are significantly increasing their inventories. In some locations, SKU counts have jumped to over 25,000. Zepto's aggressive expansion, fuelled by a recent $1 billion funding round, positions it as a key player.
BofA Global Research predicts India's quick-commerce market will grow exponentially, jumping from $2.8 billion in 2023 to $22 billion by 2027. Quick-commerce could start taking over some e-commerce categories as it expands, driven by rising demand for faster deliveries.
When Will The Music Stop?
I recently spoke with K. Vaitheeswaran, a veteran in India's e-commerce industry and author of Failing to Succeed. Like many of us, Vaitheeswaran was initially sceptical about the quick-commerce model. "When Zepto and others began scaling, it felt like a solution looking for a problem, and 10-minute delivery didn't seem necessary. But now, I've seen a clear shift in how Indian consumers behave. Even my wife, who is usually cautious about online shopping, regularly uses these platforms."
However, Vaitheeswaran, like me, still questions the long-term sustainability of this model. "I'm not sure how they'll keep this going. The cost of maintaining deliveries and inventory across multiple locations is high. What happens when the flow of venture capital dries up?"
Did Amazon And Flipkart Truly Miss Out?
Vaitheeswaran has a pragmatic view. "In India, it's rare to miss a bus completely. Flipkart has already launched 'Minutes', and Amazon is also active in this space. The real challenge for them - and others like BigBasket - is to reposition themselves as the leading platforms for quick delivery in the eyes of consumers."
And that's where the real battle lies now. It's not just about ramping up operations anymore; it's about changing how consumers think. Companies like Zepto and Blinkit have already carved out that crucial brand recognition.
One thing is clear: quick-commerce isn't a passing trend. It's part of a bigger consumer shift. However, whether companies like Zepto can turn rapid growth into sustainable profitability is still an open question. They're riding the wave for now, but we'll see who can stay afloat when the funding tide recedes.
(Pankaj Mishra has been a journalist for over two decades and is the co-founder of FactorDaily.)
Disclaimer: These are the personal opinions of the author