Zomato has invested INR 4,300 crore into Blinkit since acquiring the online grocery delivery service, formerly known as Grofers, in an all-stock deal for INR 4,477 crore in August 2022. Zomato has been investing more in Blinkit, mostly to finance its rapid growth and offset operating losses in the fiercely competitive quick commerce market, according to reports published by various media houses. A media article indicates that Blinkit’s revenues sufficiently cover its operational needs; yet, the burn rate remains elevated due to aggressive expansion and rising marketing expenditures.
This necessitates more capital infusions to stimulate expansion. In a recent interview, Blinkit CEO Albinder Dhindsa expressed a similar perspective, stating that the majority of the company’s expenses arise from expansion efforts. Dhindsa stated that the expenses associated with expansion are inescapable, whether incurred through marketing or idle costs. Based on Blinkit’s growth trends, the company may have managed to offset its expansion expenses, but heightened marketing expenditures have impeded progress.
Funds Pouring in Amid Severe Competition
Blinkit’s primary competitors, Swiggy Instamart and Zepto, have been actively securing funding to broaden their operations. Swiggy secured INR 4,500 crore with its IPO in November 2024, while Zepto has accumulated almost $1.3 billion throughout many investment rounds in the past year. On February 21, Swiggy’s board approved an INR 1,000 crore investment in its supply chain division, Scootsy Logistics, which operates dark stores for Instamart.
Swiggy’s IPO prospectus revealed plans to invest an additional INR 1,300 crore in Scootsy to further expand its dark shop network. To strengthen its market position, Blinkit is adopting an aggressive growth strategy centred on its dark store architecture. As of December 2024, the corporation operated 1,007 dark stores, surpassing its growth target of 1,000 three months in advance. Blinkit has revised their expansion aim to achieve 2,000 dark stores by December 2025 instead of December 2026. Furthermore, Blinkit has broadened its product range to encompass high-value SKUs, such as televisions, laptops, and printers, to enhance the average order value.
Rapid Commerce Conflict
The rapid commerce industry has evolved into a high-cash-burn sector, with companies allocating billions towards expansion and client acquisition. Industry estimates indicate that the aggregate monthly cash burn of rapid commerce entities, including new entrants, ranges between INR 1,300 and 1,500 crore—more than double in recent months.
Despite nearing operational breakeven in Q2 FY25, Blinkit’s losses escalated in Q3 FY25, with operating losses rising to INR 103 crore from INR 8 crore in the preceding quarter. Swiggy reported a net loss of INR 799 crore, while Instamart had an adjusted EBITDA loss of INR 578 crore in Q3, compared to INR 358 crore in Q2. Zomato’s ability to continue investing in Blinkit stems from its financial stability. In November 2024, Zomato secured INR 8,500 crore in a qualified institutional placement (QIP) to enhance its balance sheet and finance its rapid commerce operations. As of December 31, 2024, Zomato possessed cash reserves amounting to INR 19,235 crore, providing adequate liquidity to support Blinkit’s expansion.
In the third quarter of the current fiscal year (Q3 FY25), Swiggy Instamart’s margins were negatively impacted by the growing rivalry in the rapid commerce market, as the company increased its investments to keep the competition at bay. The contribution margin for Swiggy Instamart decreased from -1.9% in the previous quarter (Q2FY25) to -4.6% during the reviewed quarter. Higher growth investments, especially in user engagement and the expansion of darkstores across different areas, were cited by the company as the reasons for this reduction.
It further stated that rising competition resulted in higher consumer incentives and higher client acquisition costs, which caused the contribution margin to decline. Notably, the fast commerce segment’s adjusted EBITDA margin also decreased from -10.6% in the previous quarter to -14.8% in Q3 FY25. This decline was mostly caused by higher brand and performance marketing expenditures as well as a decline in the contribution margin.
As structural changes take place, Swiggy anticipates that Instamart’s short-term margins will be range-bound. These gains will be fuelled by increased average order value, rising ad income, decreasing delivery costs as scale increases, and improved store cost efficiency.
Nevertheless, Swiggy Instamart’s gross order value (GOV) increased by 15.5% on a quarter-over-quarter (QoQ) and 88.1% on an annual basis (YoY) to INR 3,907 Cr. In Q3 FY25, its monthly transacting users (MTUs) increased by 13.9% QoQ and 62.7% YoY to 7 Mn. Compared to INR 293 Cr during the same period last year, its adjusted revenue for the period was INR 603 Cr, a 105.8% increase. It increased 17.5% sequentially from INR 513 Cr in Q2 of FY25.
Instamart Spreading its Wings
On a sequential basis, Instamart recorded a mere 7.3% increase in the quantity of orders. This was explained by Swiggy as the “back-ended nature of store expansion.” The influence on order frequency is delayed when new stores open later in the quarter since new customer acquisition occurs at the end of the quarter.
According to the company’s post-earnings teleconference, “A higher share of new customers results in a lower overall order frequency because order frequency doesn’t increase immediately for new users.” Notably, Swiggy Instamart increased the number of operational dark stores to 705 by adding 96 new ones in Q3 FY25. By contrast, rival and industry leader Blinkit expanded its shop count to 1,007 during the December quarter, adding 216 dark locations.
Additionally, Swiggy has replaced some of its smaller locations, which were between 2,500 and 2,800 square feet, with larger locations that are between 3,500 and 4,500 square feet and have the capacity to hold up to 20,000 SKUs. The average store size increased from 3,200 square feet in Q2FY25 to 3,475 square feet in Q3FY25 as a result of this expansion, the business stated in a statement.
This puts the business on schedule to meet its goal of having an active dark store footprint of 4 million square feet by March 2025. Co-founder and CEO of Swiggy, Sriharsha Majety, claims that while controlling overall growth, the company’s near-term expansion was fuelled by both geographic expansion and densification into outlying areas within already-existing towns. He continued in the call, “Most floor additions going forward will be aimed at managing overall category growth rather than entering entirely new areas.”
Financial Performance of India’s Quick Commerce Sector
It is important to note that, according to Zomato and Swiggy’s remarks following the release of their Q3 results, the December quarter was among the most competitive in the rapid commerce segments. The three major participants in the market, Zepto, Blinkit from Zomato, and Instamart, are well-funded and rapidly growing their networks.
The rivalry has gotten more fierce since e-commerce behemoths Flipkart and Amazon entered the market, while JioMart and BigBasket have increased their emphasis on speedy transactions. Swiggy is optimistic that the additional stores will become successful, nevertheless.
Overall profitability will increase as more stores stabilise and achieve steady-state unit economics; mature stores should see a 4-6% positive margin trend, according to the business. Store expenses, including fixed costs incurred prior to a store opening, usually last between 30 and 45 days, according to Majety.
However, because of increased competition, the cost of acquiring new customers can vary depending on the category’s investment level. Even though there have been some challenges in this area, we are always refining our strategy to increase productivity. He thinks that if the category as a whole expands, the company’s costs associated with acquiring new customers will eventually decrease.
FreshToHome, a D2C meat firm, has joined the fast commerce trend by offering a delivery service in a few Indian locations that takes 10 to 20 minutes. Although FreshToHome typically delivers orders in 60 minutes, the speed of delivery will rely on how close the customer is to the closest dark store. Shan Kadavil, the founder of FreshToHome, told a media channel that the company started providing speedy delivery around two months ago.
Operations and Financial Outlook of FreshToHome
The direct-to-consumer fish and meat company was established in 2015 by serial entrepreneurs Kadavil and Mathew Joseph, and it is presently present in 27 cities in the United Arab Emirates and 160 cities in India. Additionally, it sells its goods through rapid commerce marketplaces like Swiggy Instamart and Blinkit, which are owned by Zomato, as well as e-commerce sites like Amazon and Flipkart.
In certain places throughout the nation, the startup charges a platform fee of INR 4 for every order in addition to the money it makes from product sales. To date, FreshToHome has raised around $377 million in investment. In its most recent round of fundraising, which was headed by Amazon Sambhav Venture Fund and included participation from E20 Investment, Mount Judi Ventures, and other current investors like Investcorp, it raised $104 million.
The D2C brand’s standalone net loss for its India operations decreased from INR 313.17 Cr in the previous fiscal year to INR 149.73 Cr in the financial year 2023-24 (FY24), a 52.18% decrease. Revenue increased from INR 24.91 Cr in FY23 to INR 369.55 Cr in the fiscal year under review, a 15X increase. FreshToHome faces competition from companies such as Zappfresh and Licious in the Indian direct-to-consumer meat sector, which is expected to reach a value of $119.36 million by 2030.
India’s Quick Commerce Sector has Become New Battle-Ground
Several firms in the nation are adopting the rapid commerce model at the same time as FreshToHome’s entry into the 10–20 minute delivery market. Giants like Flipkart Minutes, Nykaa, and Myntra have entered the market in addition to established players like Zepto, Swiggy Instamart, and Blinkit.
Amazon declared Tez and Myntra introduced “M-Now,” while Flipkart ventured into fast commerce with “Minutes.” Now, every major company is concentrating on the quickly expanding fast commerce business, due to the demand and broad adoption in tier-2 and tier-3 cities as well as metro areas.
According to the Tracxn study, the rapid commerce industry had a notable increase in funding in 2024, raising $1.37 billion in equity capital from seven rounds, primarily owing to Zepto, which raised $1.355 billion in three $300 million rounds. Redseer, a consultancy firm, projects a 40–45% GMV CAGR for q-commerce over the next three years. All players have now increased their services beyond only grocery and food to include toys, Dhanteras gold, cosmetics, fashion, and electronics, among other things.
According to a media outlet report, Zepto, a quick commerce startup, is thinking of raising the amount of its initial public offering (IPO) to between $800 million and $1 billion, including secondary shares.
The company’s intentions for a public offering, which include an expected $5.5 billion in gross sales for the last quarter of FY26 with positive EBITDA (excluding ESOPs), were recently discussed by CEO Aadit Palicha with large mutual funds. According to the article, which cited brokers, this estimated amount is approximately equal to the rapid commerce industry’s total gross sales for the prior calendar year.
In mid-2024, the corporation started preparing for its initial public offering (IPO), initially aiming for $450 million in primary capital. The business is considering a range of at least $800 million or more, according to a source cited in the paper. This includes an enhanced primary fundraise and the possibility of selling at least $300–400 million worth of shares in an Offer for Sale (OFS).
Zepto Writing a New Success Story
By surpassing 900 dark stores, Zepto has surpassed expectations and is aiming to reach 1,000 locations. This development is a component of a larger plan to concentrate on growing the company and guaranteeing profitability. At the moment, Zepto receives between 1.1 million and 1.3 million orders every day. Sales of non-food items such as clothing, electronics, and miscellaneous merchandise now account for INR 200 crore of the company’s monthly revenue.
Increasing its domestic ownership is one of Zepto’s other main objectives. Prior to filing for its IPO, the company wants to have at least 40% of its shares held domestically. Zepto is moving its domicile to India as part of this process by combining its Singaporean parent business with an Indian organisation.
Zepto’s IPO
With plans to add more firms closer to the offering, Goldman Sachs and Morgan Stanley are among the lead banks for Zepto’s initial public offering. As it competes with rivals like Flipkart Minutes, Blinkit by Zomato, and Swiggy Instamart in the quickly expanding industry, Zepto secured $350 million in a financing round in November 2024, increasing its total cash reserves to almost $1.4 billion. Although Zepto’s IPO pricing is still up in the air, the firm is thinking of comparing its KPIs to those of Blinkit.
Zepto has lost a lot of money despite its expansion, spending between INR 1,000 and 1,100 crore in the previous three months to fight with its main rivals. According to the various media reports, Zepto’s high burn rate helped it grow its network of dark stores in both existing and new areas, bringing its gross sales to $3 billion, just below Blinkit’s $3.7 billion. Although it too experienced an adjusted EBITDA loss of INR 103 crore, Blinkit claimed a 120% year-over-year rise in gross order value for the December quarter, hitting INR 7,798 crore.
Zomato has increased competition in the rapidly changing quick food delivery market by subtly launching a 15-minute meal delivery service. Currently accessible through the Zomato app, the new functionality puts the business in a competitive position against rivals such as Swiggy’s Bolt, Magicpin, and Zepto.
Although the service has not yet been formally announced, it is currently operational in a few major cities, including Bangalore and Mumbai. In the app’s explore section, a special “15-minute delivery” page has emerged, displaying a variety of ready-to-eat and quick-to-prepare items from participating restaurants. Similar to Swiggy’s Bolt, Zomato restricts deliveries to eateries within two kilometres in order to guarantee prompt service.
Rapidly Sprawling Nexus of Quick Commerce
With its decision to provide 15-minute delivery, Zomato enters a highly competitive market where quick delivery is increasingly important for standing out from the competition. This comes soon after the debut of Blinkit, Zomato’s rapid commerce division, which will soon unveil “Bistro,” a service that promises to bring nutritious juices, snacks, and meals in a matter of minutes.
In a similar vein, Swiggy began offering its Bolt service in October 2024 and has since stated that 5% of all of its food delivery orders are currently completed using this expedited delivery option. In order to meet the increasing demand for lightning-fast service, Zepto has also stepped up its focus on quick meal delivery by releasing a second app called Zepto Cafe.
Other Players Soon to Join the Race
Ola Dash, Ola’s 10-minute food delivery service, began in Bengaluru and is currently being rolled out nationwide. With JioMart, Reliance also intended to enter the fast commerce market last year, offering deliveries in less than 30 minutes. According to reports, Myntra, a shopping portal, has begun testing its own 30-minute delivery service for specific brands in a few Bengaluru neighbourhoods.
Performance of India’s Quick Commerce Sector in 2024
In addition to substantial venture capital and expansion, the quick commerce industry saw the arrival of big companies and experienced remarkable user growth in 2024. Zomato-backed Blinkit turned adjusted EBITDA positive in March 2024, and Swiggy went public recently.
Amazon declared Tez and Myntra introduced “M-Now,” while Flipkart ventured into fast commerce with “Minutes.” Now, every major company is concentrating on the quickly expanding fast commerce business, due to the demand and broad adoption in tier-2 and tier-3 cities as well as metro areas.
According to the Tracxn study, the rapid commerce industry had a notable increase in funding in 2024, raising $1.37 billion in equity capital from seven rounds, primarily owing to Zepto, which raised $1.355 billion in three $300 million rounds. Redseer, a consultancy firm, projects a 40–45% GMV CAGR for q-commerce over the next three years. All players have now increased their services beyond only grocery and food to include toys, Dhanteras gold, cosmetics, fashion, and electronics, among other things.
In today’s fast-paced world, Time has become one of the most valuable and fleeting resources. With the fast-paced lifestyle, people prefer everything quick and easy. Few entrepreneurs have managed to capture this essence of modern consumer needs and come up with extraordinary solutions to modern problems.
One such entrepreneur is Aadit Palicha, the Co-Founder and CEO of Zepto.
This article talks about his inspiring story of unparalleled success. Learn about Aadit Palicha, his education, career, family, net worth, Zepto, and more from this article.
Aadit Palicha – Biography
Name
Aadit Palicha
Born
2001
Birth Place
Mumbai
Education
IB Diploma at GEMS Education Bachelor’s degree in Computer Science at Stanford University (Dropped Out)
Aadit Palicha, born in Mumbai in 2001, has the credit of being one of the youngest CEOs in India. After completing his schooling, he got the opportunity to pursue higher education in Computer science at Stanford University, one of the world’s most prestigious institutions.
However, Palicha’s academic journey took an unconventional turn when he decided to drop out of Stanford. The decision was not out of failure but rather a deep-rooted belief that his time and energy could be better spent pursuing entrepreneurial dreams. He realized that India, with its rapidly growing digital economy, presented a golden opportunity for disruption.
While it will be hard for anyone to drop out of Stanford, Aadit not only took the courageous decision but also proved that it was worth the risk.
Kaivalya Vohra and Aadit Palicha – Co-founders of Zepto
At the age of as early as 17, Aadit began his business career by launching GoPool, a student carpool app in Dubai, before Zepto. Sadly, GoPool was unable to gain traction. Later, however, he and Kaivalya Vohra, his childhood friend founded KiranaKart, which ran for roughly ten months. But again, the two decided to shut down KiranaKart since they could not discover a solid product-market fit.
The duo did not sit back discouraged but took these setbacks as learnings and launched the now highly successful Zepto.
Aadit Palicha – The Birth of Zepto
This turning point in Palicha’s career came during the global COVID-19 pandemic. While many were grappling with uncertainty, Palicha identified a gap in the Indian market: the need for faster, more efficient delivery services.
Traditional eCommerce platforms, though effective, often took too long to fulfill orders, leaving a significant opportunity for quick commerce to thrive. This realization led Palicha and Kaivalya to launch Zepto in 2021. Zepto aimed to revolutionize how people shop for groceries and essentials by promising deliveries in 10 minutes—a feat that seemed impossible but became the company’s defining feature. The quick commerce sector was still in its infancy when Zepto was launched, and Palicha wasted no time in capturing the space.
His vision was simple: people shouldn’t have to wait for their everyday needs. Zepto’s hyper-local model, using micro-warehouses strategically placed in urban areas, allowed for fast deliveries, and it didn’t take long for the startup to gain traction. In just one year, Zepto managed to scale rapidly, attracting investors and customers alike.
Today, with around 150 locations across 11 Indian cities, Zepto is still expanding. Among its competitive rivals, it has shown itself to be a huge success.
Aadit Palicha hails from a supportive and entrepreneurial family. His father, Kavit Palicha, is an engineer and also a stakeholder in Zepto, while his mother, Urvashi Palicha, is the CEO of Search Point. Aadit Palicha’s parents have always been supportive and are important figures in his journey.
Aadit has always shown a passion for public speaking and debate. He was a national-level debater during his school years and served as the valedictorian of GEMS Modern Academy in Dubai.
Despite his young age and immense success, Aadit Palicha remains grounded. His life outside of work reflects a deep commitment to continuous learning and self-improvement.
Aadit Palicha – Challenges and Growth
The road to success has not been without hurdles for Palicha. His decision to leave Stanford was not without its challenges, but Palicha has always been firm in his belief that real-world experience can sometimes be the best teacher.
Palicha faced skepticism from many who believed that such rapid growth and aggressive targets were unsustainable. However, his strategic thinking, combined with a strong team and investor backing, allowed Zepto to meet and surpass expectations. His resilience in facing these challenges is a testament to his entrepreneurial spirit.
Palicha has also been vocal about the need for young entrepreneurs to be adaptable. He often speaks about how important it is to iterate and pivot quickly in the fast-moving world of startups.
Aadit Palicha – Controversy
Zepto CEO Aadit Palicha recently found himself in the middle of a controversy after a viral Reddit post accused the company of having a toxic work culture, including 2 a.m. meetings and long working hours. In response, Palicha posted on X (formerly Twitter), “I have nothing against work-life balance. In fact, I recommend it to all our competitors.” Palicha later clarified that the statement was a quote from Indian-origin CEO Daksh Gupta of Greptile, an AI startup, who had also sparked controversy for supporting 84-hour workweeks.
While the claims are unverified, the controversy has sparked questions about workplace practices in fast-growing startups like Zepto.
FYI, not my quote – read it from an interview of Daksh Gupta.
Aadit Palicha maintains a low profile on social media, focusing more on his business ventures rather than his personal life. His LinkedIn profile reflects his professional journey, including his role as the co-founder and CEO of Zepto, and highlights his achievements in the startup world.
Despite his youth, he has gained significant attention and followers, particularly from aspiring entrepreneurs and industry professionals who admire his success in quick commerce.
However, he does not appear to be highly active on other platforms like Instagram or Twitter (now X), keeping his social media presence more business-oriented.
Palicha’s achievements have not gone unnoticed. His work with Zepto has earned him several accolades and awards, both within India and internationally.
Some of the famous recognitions that he has received:
He was enlisted in the Forbes India 30 under 30, 2024
He was also in the Economic Times 40 under Forty, 2024
He is also the second youngest to be featured in the Hurun India Rich List in 2024.
Beyond individual awards, Palicha has also been recognized for his contribution to the startup ecosystem. He has been invited to speak at numerous industry events, sharing his insights on scaling a business, leadership, and the future of quick commerce.
End Note
Palicha’s story is of great inspiration to many young entrepreneurs across the country. From his early decision to leave behind a conventional academic path to building a billion-dollar company in record time, Palicha embodies the spirit of modern entrepreneurship. With many more years ahead of him, Palicha is undoubtedly a name to watch as he continues to shape the future of business in India and beyond.
Aadit Palicha is the co-founder and CEO of Zepto, a quick commerce platform.
What is Aadit Palicha age?
Aadit Palicha is 23 years old. He was born in 2001.
Which college did Aadit Palicha drop out from?
Aadit Palicha dropped out of the prestigious Stanford University.
What is Zepto net worth?
Zepto’s valuation is $5 billion as of December 2024, after raising $340 million, as it gears up for an IPO possibly in 2025.
What is Aadit Palicha education?
Zepto CEO, Aadit Palicha’s education includes an IB Diploma in Mathematics and Computer Science from GEMS Education. He then joined Stanford University to study Computer Science but later dropped out to build Zepto.
Who is Aadit Palicha father?
Aadit Palicha’s father, Kavit Dilip Palicha, is an engineer and a stakeholder in Zepto.
What is Aadit Palicha net worth?
Aadit Palicha has a net worth of INR 4,300 crore and was the second youngest on the Hurun India Rich List 2024.
According to various media reports, the Food Safety and Standards Authority of India will meet with important representatives from the main rapid commerce platforms, such as Blinkit, Swiggy, Instamart, and Zepto, within the next ten days.
Reports further state that the main goal of the discussion is to address the grave concerns about the sale of consumer goods, particularly packaged food items, that are getting close to expiration dates on these online platforms.
Consumer Forums and Trade Bodies Urging Regulator to Step In
Numerous consumer forums and trade organisations have been advocating for the Union government to take action against e-commerce and quick commerce companies for failing to provide mandatory disclosures, including the expiration and best-before dates of groceries and other daily essentials sold on their platforms.
Additionally, they have urged the government to look at how fast-moving consumer goods companies are abusing these channels by selling products that are about to expire. Although the original shelf life was substantially greater, consumers have complained that these convenience platforms are delivering products with significantly shorter shelf lives.
According to Sachin Taparia, founder of LocalCircles, an independent community platform that conducted a survey with 12,000 people nationwide, at least 57% of respondents are worried about online businesses failing to display their best before dates. The results of the survey were forwarded to the FSSAI and the Department of Consumer Affairs last month.
A packet of bread, which usually has a five- to seven-day shelf life, was sent to certain customers with just one day remaining before it expired. According to Taparia, customers who bought other perishable goods noticed similar issues.
Violation of the Food Safety and Standards Amendment Regulations of 2020
The Food Safety and Standards Amendment Regulations of 2020, which require platforms and sellers to offer only food items with a minimum shelf life of 30% or at least 45 days left for sale, are allegedly being disregarded by these quick service organisations.
In order to stop the sale of products that are about to expire, the food regulator will also meet with state food safety commissioners this week and give them instructions to scrutinise e-commerce and quick-commerce businesses more closely. Officials say they will probably be told to perform unexpected on-site inspections to make sure that these online platforms’ warehouses and dark stores don’t include goods with less than 30% of their shelf life left.
For various reasons, the Competition Commission of India and the Central Consumer Protection Authority, which is housed under the Ministry of Consumer Affairs, have also begun to examine the fast delivery behemoths.
The All-India Consumer Products Distributors Federation had previously urged the ministry to enact stronger rules in order to stop these kinds of abuses. They assert that the packaged goods business is increasingly using the quick commerce platforms as a means of pushing unsold inventory. The federation had issued a statement stating that “this practice, often disguised by steep discounts, poses a significant risk to consumer rights and threatens the stability of traditional retailers.”
Among the businesses that do not provide best-before dates in their product photos or descriptions are Swiggy, Instamart, Zomato’s Blinkit, and Zepto. By displaying the production and expiration dates of the packaged items offered on its website, Flipkart Minutes, on the other hand, distinguishes itself as the only platform that offers transparency.
Zomato is Already Under Scanner
Food safety officials in Telangana recently discovered 18 kg of button mushrooms classified as packed on October 30 during a raid at Zomato’s Hyperpure warehouse. The inspection was conducted on October 29.
However, Zomato CEO Deepinder Goyal asserted that the warehouse crew had already spotted these mushrooms and “were rejected during an inward” quality check, with a future packaging date at the company’s Hyderabad plant.” This is unusual and was caused by a vendor-side manual typing error. However, Goyal had stated on X, “The concerned vendor has been delisted from our database.”
The All India Consumer Products Distributors Federation (AICPDF) reports that over 2 lakh local “kirana” (general) stores have closed in the last 12 months as customers increasingly use fast delivery services like Blinkit and Zepto. According to various reports, the AICPDF blames these closures on the fast commerce industry’s explosive growth and the economic downturn. It plans to present the findings to the Ministry of Commerce and Industry and the Ministry of Finance in the coming days in order to request their action.
The largest organisation in India, the AICPDF represents 4 lakh distributors of fast-moving consumer goods (FMCG) for well-known corporations like Nestle India Ltd., Dabur India Ltd., and Hindustan Unilever Ltd.
Major Metro Cities Witness the Worst Impact on Businesses
Kirana shops in urban areas have been the most impacted, according to the industry group. Metro areas were home to about 45% of the 2 lakh shuttered kirana shops. 30% were Tier 1 cities, while 25% were Tier 2/3 cities.
According to Dhairyashil Patil, national president of the AICPDF, kirana shops, which have traditionally prospered through competition, including the rise of supermarkets, now face an existential risk as a result of the rise of rapid commerce and the economic slump. He claimed that in order to attract clients, quick commerce companies are using deceptive pricing, which involves offering steep discounts and selling below cost. This has led to an unequal playing field, which is hurting the clientele and financial success of kirana shops.
Methods Used by Quick Commerce Platforms That Are Anti-Competitive
The AICPDF requested last week that the Competition Commission of India (CCI) take action against Blinkit and Zepto, two rapid commerce platforms, for engaging in anti-competitive behaviour. They claimed that these platforms participated in unlawful pricing and monopolistic practices, as well as running underground shopfronts to get around inventory rules. Additionally, AICPDF alerted the Ministry of Road Transport and Highways about the use of possibly uninsured private vehicles for delivery by fast commerce enterprises. Furthermore, they expressed their worries to the Ministry of Health and Family Welfare that these activities compromised food safety by breaking the rules set forth by the Food Safety and Standards Authority of India (FSSAI).
Online Retailers Already Under Competition Commission’s Scanner
These developments coincide with the Competition Commission of India’s ongoing investigation into online retailers for alleged unfair activities, including predatory pricing. According to an internal study by the CCI, e-commerce giants Flipkart and Amazon India broke antitrust laws by favouring some sellers on their platforms. In a similar vein, the AICPDF requested that the antitrust body look into three rapid commerce companies for suspected unfair pricing: Zepto, Swiggy Instamart, and Blinkit from Zomato. The federation contended in its letter that many consumer goods companies abandon traditional stores in favour of direct ties with these businesses, weakening delivery standards that have been in place for decades. Quick delivery platforms’ “unchecked” growth is making it “impossible for traditional retailers to compete or survive,” the company told CCI.
The government will “give a serious thought” to protecting the interests of traders hurt by rapid commerce and e-commerce companies’ exploitative pricing strategies, according to Finance Minister Nirmala Sitharaman’s statement on September 17. Similar worries regarding the e-commerce industry were also voiced by Union Commerce and Industry Minister Piyush Goyal, who emphasised the necessity for these platforms to “operate fairly” within the nation.
As consumer demand in the metro areas continues to grow, Tata is the most recent e-commerce giant to jump on the ultra-fast delivery bandwagon, following Flipkart and Reliance Industries (RIL). According to recent reports, the Tata group’s e-commerce business Neu is about to launch ‘Neu Flash’, a rapid commerce platform, to a limited number of users to offer groceries, electronics, and clothing. In the upcoming weeks, Neu Flash will progressively reach more users.
BigBasket, which is transitioning to a fully-quick commerce model, will power Neu Flash for groceries, while Croma will offer phones and gadgets and Tata Cliq will handle fashion and lifestyle items, beginning with specific stock keeping units (SKUs).
The Mumbai-based steel-to-salt conglomerate has just placed its latest bet to attract internet buyers. Blinkit, which is owned by Zomato, Swiggy, Instamart, and Zepto are the top three companies with more than 85% of the market share. Flipkart has a service called Minutes, and Reliance JioMart is testing the service once more after deciding to discontinue its JioMart Express 90-minute delivery service.
Recent Growth of Quick Commerce Sector in India
E-commerce and other retail formats are being disrupted by quick commerce, which, according to a new Bernstein research report (an international research firm), is expanding more quickly than contemporary retail chains like Reliance Retail, Dmart, and Spencer Retail. This is one of the reasons why consumer platforms are responding to the shift by preparing to deliver a variety of goods outside of groceries in 10-15 minutes.
It is anticipated that Cliq will be implemented on both Neu Flash and BigBasket. Additionally, strategic brand alliances are being established. Tata Neu has been urged to exercise caution when spending large sums of money on consumer incentives, so it will be fascinating to see how it handles the fast commerce sector. The market leaders are also well-funded and making every effort to gain market share. After acquiring $1 billion in just two months, Zepto is now soliciting up to $150 million from local investors, posing a threat to market leader Blinkit, which has a 40% market share, according to multiple brokerages.
Neu Flash has not yet fully launched Tata-owned epharmacy 1mg, which delivers medicines within a few hours in certain areas, including Delhi NCR. Nonetheless, the platform also offers 10-minute delivery for several common headache medications and goods like protein whey. According to reports, Tata may also use the network of retail locations already in place for Croma to facilitate some of these deliveries. The outlets are already used for same-day and next-day delivery.
How Players are Planning for their Current and Future Business Operations?
BB Now is operated by BigBasket, which charges a tier-based delivery fee for different order sizes. Blinkit is providing free delivery at INR 199, while Swiggy has lowered it to INR 99 due to increased cash inflow into the industry. These price adjustments are a response to Zomato‘s intention to seek $1 billion in new funding to intensify the competition for quick commerce during the ongoing festival season, when customers are expected to spend more than they would on a typical workday.
Leading company in the quick commerce space, Blinkit, has extended notice periods for its staff, especially for senior management. A media source claims that this modification, which increases the notice period from zero to two months, is intended to help employers retain talent.
The choice to change employment contracts was made because Blinkit is up against competition in an industry that is estimated to be worth $5.5 billion. Talent retention is a key priority for Blinkit, as rivals like Zepto and Swiggy compete for a piece of this lucrative industry. The pressure to hang on to qualified employees has increased with well-funded competitors like Zepto recently investing $340 million and bigger firms like Walmart launching Flipkart Minutes in several Indian cities.
Initiative Provides Safeguarding Against Poaching
Blinkit’s action is both proactive and reactive to the current situation. To prevent competitors from poaching, the notice time has been extended. Blinkit is aware that offers from competitors, especially those with substantial financial resources, may entice their best employees to leave.
This policy was implemented in July 2024 by Zomato, the company that runs Blinkit, and it represents a move towards greater safeguards for its employees. The goal of the policy is to provide a safety net that enables the business to keep workers on for longer. Considering how quickly talent is moving in the quick commerce industry, this is not surprising. According to a media report, “A lot of companies are doing that, and Blinkit is taking measures to avoid losing talent.”
Additionally, it has been stated that Blinkit has started putting staff members who want to join direct competitors on garden leave for a period of two months. This strategy aims to stop confidential information from being disclosed.
Quick Commerce Companies Facing Severe Challenges
Although Blinkit is making a lot of efforts to protect its talent, it is not the only company in the industry dealing with these difficulties. Because these businesses have similar skill sets, quick commerce companies like Swiggy have been actively hiring from giants of online shopping like Amazon and Flipkart. Quick commerce companies have established a “hunting ground” for talent in areas linked to product design, backend operations, and advertising campaigns, making poaching a regular occurrence.
Companies such as Zepto, for example, have garnered media attention for their aggressive hiring practices, providing extremely competitive compensation and sizeable yearly raises to entice top performers. Employees may end up with yearly pay increases as a result of these tactics, which will increase the industry’s rivalry for talent.
Nitin Konde
