Delhivery to launch dark stores for e-commerce players

Delhivery founder and CEO Sahil Barua said the logistics unicorn will also provide e-commerce businesses with delivery services that will reduce the delivery cycle to 2-4 hours

Delhivery will set up dark warehouses for a few “narrow categories” and within them a set of narrow SKUs in the e-commerce sector that would require fast deliveries

Barua said multiple companies can use dark stores to share costs.

Delhivery plans to launch a network of multi-tenant dark stores enabling “fast city delivery” for e-commerce companies.

In a conference call after the earnings announcement, Delhivery founder and CEO Sahil Barua said the logistics unicorn will also offer delivery services to e-commerce businesses that will reduce the delivery cycle to 2-4 hours.

“…the intention is to…launch a network of shared dark stores that will be available for e-commerce businesses to use on a multi-tenant basis and then provide fast local delivery…” Barua said.

He said deliveries that take 30 minutes or an hour are unlikely to disrupt the broader e-commerce space. Only a few “narrow categories,” and within them a narrow set of SKUs, would require the service. Delhivery plans to set up dark stores for such categories.

He added that many e-commerce companies and D2C brands can leverage these dark stores to share costs.

“It’s basically the process of creating micro-fulfillment for most brands that sell directly to consumers…” he added.

Earlier this year, there was news that the startup was planning to expand beyond e-commerce orders to meet the growing demand in the express commerce sector as players like Blinkit, Zepto, Swiggy and Instamart drive this shift.

However, Barua said the fast-paced retail sector does not quite deliver for logistics players in terms of unit economics. Moreover, he believes that express commerce’s share of online transactions beyond grocery shopping is still quite low in terms of category penetration and geographic presence.

This was in contrast to Blinkit CEO Albinder Dhindsa’s statement on the e-commerce vs. FTA debate. In a letter to Zomato shareholders, Dhindsa said Blinkit notes Change non-food industry users from e-commerce entities.

Barua said unit economy margins are much lower for products that are preferred by quick-commerce users compared to e-commerce platforms. “I don’t believe that unit economy for delivery in less than one hour or less than 30 minutes for low-value products without significant value density and distances greater than three or four kilometers in an urban environment like India will work,” Barua said.

It is worth noting that another logistics giant, Shiprocket, recently shared this opinion and stated that the startup not focusing on fast trading but fast deliveries to offline stores. Earlier this week, a fast delivery service was introduced to the same city.

Meanwhile, Delhivery returned to the black in the first quarter of fiscal 2025, posting Net profit of INR 54.3 Cr as compared to a loss of INR 69 Cr in the previous quarter. Operating income increased by 5% to INR 2,172 Cr in Q1 FY25 from INR 2,076 Cr in Q4 FY24.