The quick commerce segment is rapidly evolving, with competition intensifying among players like Blinkit, Zepto, and Instamart. Walmart-backed Flipkart has now entered the fray with its new service, ‘Flipkart Minutes.’ This blog explores Flipkart’s potential to make a significant impact in the quick commerce market and examines how it compares to its established competitors.
Quick Commerce: A Competitive Landscape
In Q1 FY25, Zomato reported a notable increase in quarterly profit, primarily driven by its quick commerce service, Blinkit. Founder Deepinder Goyal predicts Blinkit will surpass Zomato by 2025. Meanwhile, Zepto is rapidly expanding, recently launching in Ahmedabad and planning an upcoming launch in Jaipur. Additionally, Amazon India is reportedly in talks with Swiggy about a potential deal involving its quick commerce business, Instamart.
Flipkart Enters the Arena with ‘Flipkart Minutes’
Amidst this bustling activity, Flipkart has plunged into the quick commerce market with its service ‘Flipkart Minutes.’ Initially launching in Bengaluru’s tech and residential hotspots, including HSR Layout, Gunjur, Bellandur, and Kadubeesanahalli, Flipkart Minutes offers a range of products from groceries to electronics within a quick 10 to 15-minute delivery window. The service is integrated into the Flipkart e-commerce app.
Flipkart Leveraging Strengths for Success
Flipkart plans to operate 100 dark stores during the festive season to support its quick commerce service. Dark stores are mini warehouses used for efficient delivery. Initially, Flipkart aimed to acquire a majority stake in Zepto, but after the deal fell through, they decided to enter the fast delivery arena on their own.
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Market Leader Advantage
Deepti Karthik, fractional CMO of Sleepyhead, notes that Flipkart remains the market leader in the e-commerce segment. “With the rise of quick commerce, there is noticeable cannibalisation, as q-commerce encroaches on the e-commerce market share. However, Flipkart’s strong foundation, evidenced by their one-day delivery service in 20 cities, positions them well to adapt to these changes.”
Strategic Expansion Focus
Karthik highlights Flipkart’s strength in tier-2 cities, particularly in the East and North markets. “Amazon’s brand recall is stronger in metro areas. Flipkart can pursue the Bharat story by targeting tier-2 cities, focusing on unbranded products and tapping into that market.”
Profitability and Future Strategy
Saurabh Parmar, fractional CMO, states that Flipkart’s entry into the fast delivery sector was anticipated given the sector’s rapid growth and substantial funding. The strategy aims to fend off competition from quick commerce players poised to enter the e-commerce space. “E-commerce’s future hinges on profitability. While Blinkit is currently profitable on an adjusted EBITDA basis, it needs to achieve significant profits to justify its valuation, which will require higher costs. As Blinkit expands into tier-2 cities and beyond, it must gauge consumer demand for its products.”
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Core Strengths and Profitability
Vigyan Verma, founder of The Bottom Line, highlights that Flipkart has traditionally excelled in electronics, followed by apparel and beauty. “For Flipkart, consumer electronics could become a more significant part of their segment compared to groceries, which are typically less profitable.” Verma suggests that Flipkart Minutes should prioritise delivering high-value, high-stakes items quickly, setting itself apart from competitors like Blinkit, which focus on low-value but essential needs and indulgences.
Leveraging Advertising and Loyalty Programs
Parmar proposes that beyond groceries, Flipkart can drive profitability through advertising, loyalty programmes, and private labels. By leveraging their existing customer data, Flipkart can create more localised and effective ads. Platforms like Zepto with their ‘brand of the day’ feature and Blinkit’s newly launched segment highlight the potential for significant advertising opportunities. Flipkart Minutes can capitalise on similar ad spots to boost revenue.
The Future of Quick Commerce
Looking ahead, Karthik believes that q-commerce and e-commerce will merge into a unified sector, leading to market consolidation. “With the space becoming too crowded for multiple players, the companies will merge, get acquired, or exit the market.”
Conclusion: ‘Flipkart Minutes’
Flipkart’s entry into the quick commerce market with ‘Minutes’ marks a significant development in the sector. With its established e-commerce model, strategic focus on tier-2 cities, and potential for leveraging advertising and loyalty programs, Flipkart has the foundation to challenge existing players like Blinkit, Zepto, and Instamart. As the quick commerce market continues to evolve, Flipkart’s success will depend on its ability to adapt and innovate in this highly competitive landscape.
