India\u2019s retail revolution is apace, fueled by surging demand, fierce competition and billions of dollars from global venture capital.<\/p>\n\n\n\n
Startups are competing with Amazon.com Inc. and Walmart Inc.-backed Flipkart to blanket the country\u2019s cities with small, hyperlocal warehouses and hundreds of distributors \u2014 all to deliver groceries, electronics and, in some cases, even gold coins in less than 10 minutes.<\/p>\n\n\n\n
Why is India different?<\/strong><\/p>\n\n\n\n It\u2019s a model that has flooded into \u2014 and disappeared from \u2014 almost every other major market. But investors are betting on India\u2019s diversity, even though the model is not growing as fast in the rest of the world.<\/p>\n\n\n\n With densely populated cities, low labor costs and a rising class of more than 730 million digitally-savvy Gen Z consumers and millennials accustomed to instant services, the country may be the only place where 10-minute delivery can work at scale.<\/p>\n\n\n\n SoftBank Group Corp., Temasek Holdings Pte. and Tencent Holdings Ltd. are among global investors \u2014 many of whom saw similar models collapse in the U.S. and Europe \u2014 that are pouring billions into India\u2019s instant commerce race.<\/p>\n\n\n\n The market is expected to skyrocket to $100 billion in sales by 2035, up from $6 billion now. That would make it nearly a fifth of the country\u2019s total e-commerce sales, up from just 5% today.<\/p>\n\n\n\n Delivery, 5 years old<\/strong><\/p>\n\n\n\n Just five years old, the sector has already seen explosive growth. Blinkit, which was acquired by Eternal Ltd. (then known as Zomato) for about $570 million just three years ago, is now worth at least $15 billion, according to some analysts.<\/p>\n\n\n\n Zepto, valued at $6 billion, is aiming for a public listing next year.<\/p>\n\n\n\n Swiggy Ltd., whose Instamart is its heavy artillery, is valued at $12 billion, with its fast-commerce arm estimated to account for about 40% of that.<\/p>\n\n\n\n Company valuations are rising rapidly and sharply, but profit margins are slim and the market is teeming with near-identical competitors, all vying for the same customer. Companies spend big to offer incentives and discounts, which if withdrawn for any reason could quickly collapse the model.<\/p>\n\n\n\n The three players<\/strong><\/p>\n\n\n\n The three Indian startups \u2013 Blinkit, Instamart and Zepto \u2013 have invested in last-mile delivery, creating dense networks of dark stores in urban centers. These are warehouses strategically placed to fulfill orders within a two-mile radius. The facilities resemble miniature versions of Costco Wholesale Corp. stores, optimized for efficiency. Popular items like chips and onions are located near the entrance, while bulkier, less frequently used items \u2013 such as air conditioners, stoves and kitchens \u2013 are located in specially designed spaces further back.<\/p>\n\n\n\n Amazon\u2019s recent entry into fast-moving commerce, along with Flipkart\u2019s expansion last year, pits the incumbents\u2019 vast logistics networks against newer providers built for speed.<\/p>\n\n\n\n The three players now have thousands of these mini-warehouses, most of which are being developed through franchises. Blinkit operates more than 1,500 darkrooms in more than 100 cities. Zepto has more than 1,000 in 40 cities, and Instamart manages 1,062 stores spread across 127 cities.<\/p>\n\n\n\n This is unique in India. It can\u2019t happen in the U.S. because the last-mile service is outrageous there with labor costs. In India, it\u2019s a revolution.<\/p>\n\n\n\n The Bet on Success<\/strong><\/p>\n\n\n\n And that\u2019s why it can succeed where others have failed. On the one hand, the rapid shift to digital payments, fueled by affordable smartphones and ultra-cheap data, has converged with major gaps in traditional retail infrastructure, making the country uniquely suited to 10-minute delivery.<\/p>\n\n\n\n Nearly 890 million Indians are online, transforming the way a growing population shops, pays for and waits to receive what they order.<\/p>\n\n\n\n Freezers or bulk storage are also largely absent from urban households, as the Indian diet rarely relies on frozen items and fresh produce and meat are readily available from street vendors. Consumers are buying necessities in smaller quantities and more often \u2014 a habit that is catching on in fast-paced commerce.<\/p>\n\n\n\n On the other hand, in a country where, due to a wide economic and social gap, the concept of helping is widespread, workers appear willing to operate in this way, but in a professional manner and for a fee.<\/p>\n\n\n\n In contrast, many stores are closing and some casual workers are protesting. More than 200,000 stores closed last year, according to a retail union, sparking calls for regulation. Casual workers, meanwhile, are pushing for fair pay and better working conditions. India\u2019s retail revolution is apace, fueled by surging demand, fierce competition and billions of dollars from global venture capital. Startups are competing with Amazon.com…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[620,946],"tags":[7333,904,133,7334],"class_list":["post-25915","post","type-post","status-publish","format-standard","hentry","category-business","category-companies","tag-delivery","tag-india","tag-logistics","tag-the-last-mile-service"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/25915","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25915"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/25915\/revisions"}],"predecessor-version":[{"id":25917,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/25915\/revisions\/25917"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25915"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25915"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25915"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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