Mint Primer: Can Blinkit and company compete with Amazon in electronics?

Expensive gadgets in 10 minutes. Is there any point?

Apparently so. The basis for delivering an item worth hundreds of thousands of dollars within minutes is marketing. Thanks to rising demand in urban India, high-speed trading is a highly competitive industry with slim margins. So for most companies, a large marketing budget only limits profitability. Selling expensive but popular gadgets is therefore an effective marketing campaign that ultimately leads to indirect sales. This can be compared to when e-commerce giant Amazon partnered with German-owned British carmaker Mini Cooper to offer home deliveries of expensive hatchbacks.

Why are such campaigns important?

When launched, high-speed trading was met with skepticism. However, it has become a major revenue generator for companies. However, most of the items sold on platforms like Zomato’s Blinkit, Swiggy’s Instamart, unicorn startup Zepto and more are low-value, low-margin products. In the case of expensive electronics, these ventures want to diversify into higher value products, which would be the key to future profitability growth and sustainability of the entire business model. On the other hand, Flipkart has already started rapid trading while Amazon is expected to do so soon, forcing the sector to prepare for the impact of wealthy rivals on the industry.

Have these types of tactics been used in marketing before?

E-commerce already sells worth of headphones ₹1.4 lakh, value of TV sets ₹10 lakh and gold bars. Q-comm sees electronics as a profitable business – iPhones, for example, can increase order volumes exponentially. This prompted brisk trading to sell items such as external drives, kitchen appliances, Lego toys and Hot Wheels. They attract attention and help the margins.

Could this affect Amazon, Flipkart?

Potentially yes. Experts say high-speed trading could replace traditional e-commerce through a widely distributed network of small warehouses. This will also require companies like Amazon to deliver faster, which they already do. The result will be more online electronics retailers, with Amazon and Flipkart enjoying a duopoly. This may result in a new race for customers. While Amazon and Flipkart may not lose out, they will certainly have more competitors to beat.

Is this sustainable for fast trading?

Most advertised electronic items are short-lived marketing impulses. Search for iPhone 16 or PS5 on Blinkit and you won’t be able to find them. This is because the success of high-speed trading depends on fast-moving goods, which reduces storage costs. For the foreseeable future, flash trading will continue to sell gadgets only when they make headlines. This also benefits local electronics stores. In the long run, the combination of traditional e-commerce and high-speed commerce may change the profitability of this business.