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Economic Times
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Quick commerce fires up record discounts with rivals getting quicker
- The quick commerce sector with players like Amazon and Flipkart is witnessing a rise in record discounts, leading to intense competition.
- Discounts across categories have surged to 20-25% on maximum retail price, compared to below 10% two years ago.
- Industry experts suggest that the increasing number of players, currently standing at eight, is driving this escalation in discounts.
- Analysts note that personal care products see the highest discounts, while dairy products have the lowest discount at 5%.
- Market leaders like Blinkit, Zepto, and Swiggy's Instamart are now facing competition from JioMart, Flipkart Minutes, and Amazon Now.
- Companies are focusing on building a substantial customer base and expanding into tier-II and tier-III cities rather than on short-term profitability.
- The quick commerce sector's monthly burn rate has increased significantly, with companies doubling their spending to expand their businesses.
- Morgan Stanley estimates that India's quick commerce market will reach $8 billion in 2024, expanding to $57 billion by 2030.
- Flipkart Minutes and Amazon Now are rapidly expanding their dark store networks for quick deliveries.
- Blinkit's CFO stated that market share gain is a priority over short-term profitability for the quick commerce platform.
- Companies like Zepto and Instamart offer higher discounts on bulk-buy offerings, aiming to incentivize larger basket sizes.
- These offerings result in cost savings for platforms and increased competitiveness against value retailers like Dmart.
- The competitive landscape in the quick commerce sector is expected to drive further discounting and cash burn in the near future.
- The sector's growth potential and expansion into smaller cities indicate a focus on long-term market presence and customer retention.
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