ESV Times | Monthly Newsletter | November 2024

The growth of quick commerce (QC) in India has exceeded expectations and shows no signs of slowing down. Swiggy’s IPO opens today with an aim to raise over 11k crores. Its publicly listed competitor Zomato had announced last month to raise another 8.5k crores through a QIP. It is expected that all the three major QC players – Blinkit, Instamart and Zepto are expected to operate over 1000 dark stores each by the end of 2024. Established e-commerce giants like Flipkart and Amazon have entered the space.

Several factors contributed to the initial growth spurt of the QC players. Firstly, the pandemic altered consumer behaviour, nudging more people towards online shopping and instant gratification. Secondly, the convenience and efficiency offered by quick commerce platforms have resonated well with the urban populace, who seek time-saving solutions in their hectic lifestyles. Additionally, strategic investments in technology and infrastructure have enabled these platforms to optimize their operations and deliver on their promises of speed and reliability.

The end goal of QC is not to make a buyer wait for more than 15 minutes. The impressive growth of QC is now being fuelled by the expansion of ever-expanding product categories which could be made available in 15 minutes. Notably, during Diwali, the sale of gold coins through these channels saw unprecedented demand, demonstrating their capability to cater to high-value, festive purchases. Similarly, the launch of the new iPhone on quick commerce platforms generated significant traction, showcasing their potential as major sales avenues for premium electronics. These examples highlight the expanding horizons of quick commerce beyond just groceries and everyday essentials.

Quick commerce has proved to be of immense benefit to new Direct-to-Consumer (D2C) brands, particularly for mass-premium health-centric groceries or ready-to-eat brands. One of our portfolio companies Lo! Foods successfully leveraged quick commerce as a vital distribution channel, witnessing substantial growth in its customer base and sales volume. The rapid delivery model aligns perfectly with Lo! Food’s promise of convenience and health, strengthening its market presence and consumer loyalty.

At ESV, we are continually scouting for innovative business models within the quick commerce space. We believe that the sector holds enormous potential for disruption and value creation, and we are excited to partner with entrepreneurs who are pioneering the next wave of growth and innovation in this dynamic industry.

Ecotone

✨ Celebrating the spirit of Diwali at Ecosystem Ventures!

Last week was filled with festive joy, from creative bay decorations to a heartwarming donation drive and our Diwali meet & greet. Wishing everyone a season of light, happiness, and prosperity! 🌟

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