What Blinkit, Swiggy Instamart, Dunzo, Zepto, BigBasket has in their cart for you?
Blinkit, Zepto, Dunzo, and Swiggy’s Instamart putting the on-demand economy on steroids in India, as on regular basis these companies are trying to be better from another one, by promising delivery in 5 minutes, 10 minutes with a cherry on the top as no delivery charges which is attracting consumers. It is now blurring the experience between eCommerce and brick-and-mortar shopping.
Quick delivery or rather same-day delivery forms part of the long list of factors that delight customers. In eCommerce, this translates into more purchases. As on regular basis we need few items in our home, so due to covid-19 people are avoiding to go shopping for little and they are preferring online orders more, and why not when you can receive order in 10 minutes.
Currently, quick commerce is in the nascent stage and is concentrated in metro cities of India i.e. Mumbai, Bengaluru, Delhi, Pune, Chennai, Ahmadabad, Gurgaon, Noida, Hyderabad, Kolkata, but after covering these cities fully, companies will chase for tier-1 and tier-2 cities, as mobile penetration is increasing and people are demanding these kinds of services more.
What is the future planning of big Indian companies for quick commerce?
As you can sense this war is going to be more intensify because all these startups are filling their chests for war as Zomato gave Blinkit a $100 million shot in the arm, Swiggy is investing $700 million in Instamart, Reliance gave Dunzo $240 million and Zepto raised $60 million just six months after launching its app and Amazon and Flipkart already have huge giant parents.
Grofers now Blinkit is experimenting in the 10-minute delivery model in 12 cities to be followed by the next 25 cities it services, currently, it has 200 dark stores in these 12 cities. Similarly hyperlocal delivery platform Dunzo has Dunzo Daily that delivers via its chain of 60 dark stores and dunzo is aiming to scale operations of Dunzo daily in 20 cities by end of 2022. Swiggy does the same through its ‘Instamart’ in metro cities. Flipkart is planning to introduce express delivery services in over 200 cities by the end of 2022. Zepto which is currently working in 8 cities is planning to expand its network in other cities also. Amazon is also jumped in the race through amazon fresh 2 hr delivery. Tata BigBasket is also planning to launch 30-40 minutes delivery.
Read – What is the Future of Dark Store in India?
How Real Estate will be evolving near dark store?
The rising demand for dark stores is pushing the growth of urban logistics spaces across India. The rising demand for dark stores from e-commerce players in city central locations is prompting the growth of urban logistics spaces. While dark stores are at a very initial stage in India, urban logistics is on the cusp of going mainstream.
As retailers, e-commerce and logistics players aim to become more agile to meet faster consumer delivery expectations, dark stores and on-demand space is catching on.
Customers’ expectations for rapid and on-time deliveries continue to grow, even though few want to pay extra for it. The World Economic Forum predicts instant delivery will grow by 10 % annually through 2030, while same-day delivery will increase between 20 to 40 % annually.
Their promise to deliver anything in 10-30 minutes is filling your neighbourhood with dark stores. But investing heavily in dark stores within a two-three kilometre radius of these hotspots can only go so far. These companies are chasing space in the same locality so in a few areas owners are demanding higher rents.
There will be a considerable effect on real estate. When the delivery span is reduced to a few minutes or a couple of hours or even a day, the need for warehouse space will increase considerably. Let me explain to you why –
- Currently companies have mother warehouse or regional distribution centre in city outer skirts, this warehouse has all kind of things in store, which got delivered same day or after 7 day. From these warehouses parcel moves to collection centre warehouse or small warehouse, near to the city, they are many or in all direction of the city, covering most of the city from outer periphery. Currently companies are using these warehouses to deliver same day delivery or 2 day delivery promise. Now if you want to deliver as quick as 10 minutes to 2 hr, now you need more fulfilment centres in between the city to deliver your product on time.
- So from mother warehouse parcels moves to collection centre warehouses and from there they delivered to small fulfilment centres or dark stores.
- As quick delivery is rising so Fulfilments spaces are becoming smaller, due to shorter audience reach and more fulfilment centres or dark stores after every 2-3 km.
So there will be a huge opportunity in real estate especially for smaller properties located at prime locations ranging from 2000 sq. ft – 20,000 sq. ft. Thanks to the agility of last-mile delivery, these smaller properties enabled eCommerce players to have more proximity to their customer locations.
Across India, urban logistics spaces are expected to surpass 7 million sq ft by 2022, shows data from JLL India. The increasing trend of faster goods distribution and e-commerce penetration nationwide is expected to push the demand further.
Earlier the surge in eCommerce has led to the demand for warehouses across India and still increasing, now due to the rise in quick commerce, small space demand in city-centre locations will increase thereby giving owners and developers a clear opportunity to capitalise on the demand.
Who is going to win this war?
As we can’t say much about which company is going to lead, but for sure we can say the customer is going to win on many fronts. If you have space in city centre location which is idle, now you can get a good return from that. These companies are preferring ground floor space but they can go for the basement and 1st floor also.
You can list your property on Industrialplot.com, an exclusive property portal for Industrial and commercial properties, and you can be directly contacted by these companies representatives.
