Synopsis: The quick commerce sector in India has seen rapid growth over the last 12-18 months, with incumbent platforms like Blinkit, Swiggy Instamart, Zepto, and BB Now dominating the market. New entrants like Flipkart, Amazon, Reliance, and Ola are launching their quick commerce services, signaling heightened competition.
The quick commerce market in India has witnessed exponential growth over the past year, driven by consumer demand for faster delivery and a wider assortment of products.
Leading platforms such as Blinkit, Swiggy Instamart, Zepto, and BB Now have established significant market shares, ranging from 10% to 45%.
These platforms have become essential players in the sector, setting benchmarks for service delivery and pricing.
In response to this booming market, major players like Flipkart, Amazon, Reliance, and Ola are stepping into the quick commerce arena.
Flipkart, for instance, has launched its service 'Flipkart Minutes' in Bangalore, which promises delivery in just 9-10 minutes across 30 categories.
UBS's evaluation of Flipkart's platform revealed that while the service's assortment and delivery timelines are on par with established players,
Flipkart's prices are approximately 10% lower.
Additionally, Flipkart has waived delivery fees for orders above ₹99, potentially using lower pricing as an entry strategy to attract customers.
UBS has expressed interest in monitoring how these competitive pricing strategies evolve as these companies expand their services to other regions.
Despite this new competition, UBS remains optimistic about Zomato's future in the quick commerce market.
Zomato's latest quarterly results were promising, with a remarkable 130% year-on-year growth in gross merchandise value (GMV) for its quick commerce segment, coupled with a 27% growth in food delivery—both surpassing market expectations.
Zomato's management has provided a positive outlook, aiming for a compound annual growth rate (CAGR) of 25-30% in food delivery and plans to double the number of its dark stores to 2000 by the end of 2026.
As a result, UBS has raised its GMV estimates for Zomato by 20-30% for quick commerce and 2-3% for food delivery for the fiscal years 2026-2028.
Consequently, UBS has increased its price target for Zomato to ₹320, up from ₹260, and maintained its 'Buy' rating on the stock.
In conclusion, the quick commerce market in India is poised for intense competition as major players like Flipkart, Amazon, Reliance, and Ola enter the fray.
While these new entrants bring aggressive pricing strategies, incumbent platforms like Zomato's Blinkit continue to show strong growth.
With Zomato's strategic plans and optimistic outlook, the company is well-positioned to maintain its leadership in this rapidly evolving market.
Disclaimer: This article is for informational purposes only and should not be considered as financial or investment advice. Readers are advised to consult with a qualified financial advisor before making any investment decisions.
