Understanding Flipkart's Entry into Quick Commerce: Market Impact and Implications

E-commerce giant Flipkart is set to enter the quick commerce (QC) industry by establishing a network of dark stores in major cities such as Bengaluru, Delhi (NCR), and Hyderabad.

The company plans to offer 10-15 minute delivery services in at least twelve cities over the next six to eight weeks, giving competition to existing platforms like Blinkit, Zepto, and Swiggy's Instamart.

Image source YourStory.com

This is Flipkart's third attempt to enter the QC space, and the company has the potential to disrupt the existing industry structure. However, its success will depend on several factors, such as finding a strong product-market fit and optimizing its technology and supply chain for quick turnarounds.

QC has a strong foundation, and there's plenty of market space for 3-4 major players. This could prompt e-commerce platforms to rethink strategies and pursue mergers to stay competitive.

Image source Indian Startup News

In 2021, the QC market, excluding non-grocery sectors, was valued at $45 billion. However, by December 2023, it was only around $3 billion, compared to the $6 billion online food delivery market. Deloitte predicts the QC market will grow to $40 billion.

Flipkart's re-entry is likely to be challenging, requiring significant execution efforts, an area where the company's previous endeavours were lacking.

Blinkit, with its commanding 46% market share in QC, is considered to have strong market leadership and a healthy balance sheet, making it better positioned to withstand challenges than its competitors.