How the entry of Reliance and Flipkart is shaping the fast trading market

As people stayed at home during Covid-19, home deliveries surged across India. That’s when the idea of ​​fast-paced retail was born for Aadit Palicha and Kaivalya Vohra. Alone in Mumbai, Palicha and Vohra felt they needed a new model to meet customer demand, as offline options seemed limited.

Then, in April 2021, Zepto was founded, which by 2023 would become the country’s first unicorn. Zepto recently raised $665 million in funding at a $3.6 billion valuation. This funding round, nine months after raising $235 million at a $1.4 billion valuation, includes new investors Avenir, Lightspeed, and Avra, alongside existing investors Glade Brook, Nexus, and StepStone, with Goodwater and Lachy Groom co-leading the round.

Zepto is one example of a rapidly growing e-commerce space in the country. The current market size of the e-commerce space in India is $2.8 billion, according to a report by Redseer Strategy Consultants.

By increasing GMV by 77% last year, Q-commerce has shown that it can maintain the Covid-related momentum it had in 2019-2022. This is true even though 2023 was a year of low demand, which resulted in The report shows that the e-commerce market is growing nominally.

Read: Why Amazon Fresh prioritizes quality and cashback offers in a competitive fast-paced marketplace

The report adds: “Q-commerce platforms have an excellent understanding of the buying patterns of their target customers and tailor the selection and experience accordingly.”

A recent example of the same is the T-20 match when quick trading platforms offered various personalized items and made several offers. Blinkit recently sold the “India Cricket Fan Shirt” during a match. No wonder there was a 40-50 percent increase in sales and revenue on the final night of the match, according to a report by the Economic Times. Amid the increasing penetration of speed trading players, companies are jumping into the speed trading race.

Zepto is in fundraising talks again

Zepto is in talks to raise another $400 million. The company is valued at $4.6 billion, according to Information. Meanwhile, Zepto has set aggressive growth goals in India, hoping to expand its network of dark stores — warehouses — to 700 by March 2025.

In a conversation with X (formerly Twitter), Palicha said that they are building Zepto into a world-class Indian company valued at $50 billion that employs lakhs of people — as a way to give back to the country that has given us so much.

Entry of Reliance and Flipkart

Reliance Retail recently launched a pilot for instant delivery of grocery and fast-moving consumer goods (FMCG) in certain areas of Mumbai and Navi Mumbai.

The group’s fast delivery service has been included as a ‘hyperlocal delivery’ option on the Jiomart mobile app, as per an Economic Times report. While orders will be fulfilled within an hour, the company plans to reduce delivery times to 30-45 minutes as more stores are connected to the system.

Read: Flipkart mulling Swiggy deal for early entry into commerce: Report

To add to the race, a Business Today report states that Flipkart is planning to launch ‘Flipkart Minutes’. The company’s goal is to deliver goods within fifteen minutes. With the launch, Flipkart intends to leverage its supply chain by focusing on electronics, food and other essentials.

While Quick Commerce has focused primarily on grocery and FMCG products, it is working to add high-margin categories to its SKUs. Now, platforms like Blinkit, Zepto, and Instamart are looking to sell air conditioners, refrigerators, and smartphones.

Speaking to Business Outlook, Anand Ramanathan, partner and leader, consumer products and retail, Deloitte India, had earlier said, “Electronics is the lowest hanging fruit.” Ramanathan believes that the key to sustaining growth in the fast commerce industry is improving unit economics. To achieve this, fast commerce platforms need to focus on selling higher-priced items. Basically, unit economics measures the profit or loss per unit sold, and for any business to remain profitable, it needs to generate more profit than loss on each item sold.