The rapid rise of 10-minute grocery delivery apps is revolutionizing shopping habits in India, with Swiggy at the forefront of this quick commerce boom. In a bustling middle-class suburb of Mumbai, Swiggy’s SoftBank-backed grocery warehouse is a hub of activity, with workers racing against time to fulfill orders. The objective: deliver groceries within an impressive 10-minute window.
Clad in bright orange uniforms, Swiggy’s delivery riders zoom through the sweltering streets to collect and deliver groceries from the warehouse, which tracks their every move. “We aim to complete each pickup in just 90 seconds,” says warehouse manager Prateek Salunke, highlighting the precision and speed required.
Booming demand for speedy deliveries
Swiggy’s expanding network of warehouses is a testament to the growing demand for lightning-fast deliveries, providing everything from essentials like milk and bananas to niche items like condoms and roses. This swift service is transforming the traditional grocery shopping landscape in India, challenging the dominance of small, neighbourhood stores that have long been a staple for Indian consumers.
Historically, Indians have depended on local stores for groceries, either by visiting them in person or making phone orders for delivery. The arrival of e-commerce giants like Amazon and Flipkart introduced a new dimension to shopping, offering same-day or next-day delivery. However, Swiggy, along with competitors Zepto and Zomato’s Blinkit, is setting a new standard with even faster delivery times.
According to a Goldman Sachs report from April, quick commerce now accounts for $5 billion, or 45%, of India’s $11 billion online grocery market. By 2030, it is projected to grow to 70% of the market, which is expected to expand to $60 billion.
Swiggy’s Strategic Shift
Originally established as a food delivery service in 2014, Swiggy is now pivoting towards the grocery market, seeing it as a far larger opportunity. A confidential strategy document from December 2023 revealed that Swiggy’s Instamart service is targeting urban consumers aged 21–35 who prioritize convenience. The company plans to increase its number of warehouses from 500 to 750 across 25 cities by April 2025.
While global trends show a decline in demand for quick delivery services post-pandemic, India is bucking this trend. Consultant Sumat Chopra of Kearney attributes this to the availability of affordable warehouse space and a cultural preference for quick, localized shopping.
Impact on Small Retailers
However, the rise of e-commerce is putting immense pressure on traditional retailers. Local grocers and kirana shops are seeing daily sales plummet by half due to the competition from these apps, as these apps have completely changed the game.
Retailer associations across four Indian states report monthly sales declines of 10% to 60% as more consumers turn to the convenience of quick commerce apps. Some small stores are adapting by forming WhatsApp groups to offer quicker delivery within a local radius.
Challenges and Future Prospects
Despite the high volume of transactions, the quick commerce sector remains largely unprofitable. Swiggy’s internal documents reveal that while its annualized order value for Instamart tripled from $340 million in December 2021 to $1 billion in September last year, it is still operating at a loss.
Rival Zomato’s Blinkit, which was acquired in 2022, has also faced profitability challenges, though it has recently managed to break even. Analysts caution that the reliance on urban customers and high promotional expenses could be risky, given the low-margin nature of the grocery business.
In response, both Swiggy and Blinkit are diversifying their offerings. Swiggy now sells fitness products and electronics, while Blinkit saw a surge in sales of roses and gifts on Valentine’s Day. Swiggy’s internal strategy notes that Instamart is evolving from being an “Indian version of 7-Eleven” to positioning itself as an “online supermarket.”
As quick commerce reshapes the retail landscape in India, the challenge for traditional stores will be to innovate and compete in this fast-paced environment.