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Quick commerce market heats up; Blinkit drops delivery fees in select markets
In response to elevated competitive intensity from players like Amazon and Flipkart in a few markets on an expansion mode, India's largest quick commerce company Blinkit has dropped delivery charges in these micro-markets across cities like Gurgaon, Bengaluru and Mumbai to protect its key customer cohorts, people in the know said.
“Blinkit has always been dynamic in responding to competition and tweaks these fees to guard its leadership…platforms like Amazon Now are showing a rapid scale-up in some key markets where Blinkit operates. These changes by Blinkit are not blanket in nature,” a senior industry executive said.
Over the last 3-4 months, quick commerce platforms Zepto and Swiggy's Instamart had also dropped various fees and charges for users with a minimum cart value. At the time, Blinkit had not dropped its charges.
Zepto, after closing a $450-million funding round in October, removed handling fee and surge charge billed to its customer for every order as well as reduced the minimum order value to Rs 99 for free delivery. Instamart had then followed the fee waiver scheme.
Blinkit did not respond to email queries.
Makers of grocery essentials and daily needs have been particularly relying on quick commerce platforms to amp up sales over the past two years. "While competitive intensity within the platforms and doing away with charges on deliveries are internal matters, such measures do bring in more consumers to these channels. We have seen that the entry of Amazon Now, which has not been charging any delivery fee from consumers, has particularly catalysed the quick commerce market in cities where it has entered," said a senior executive at a leading packaged foods market. He requested not be identified.
Last month, in an interview with ET, Amazon's Amit Agarwal had said that the company was seeing strong traction in cities where its quick commerce service was launched. “What's interesting is that whenever we launch a micro-fulfilment centre (or dark store), within 90 days we see Prime members in that area switch over to us,” Agarwal had said.
During December, Amazon was adding two dark stores every day getting to the 300-store mark by the year's end.
According to BofA Research, Blinkit is the leader in quick commerce having cornered over half the market, with the remaining divided among Zepto, Instamart, Tata Digital-backed BigBasket, Flipkart Minutes, and Amazon Now. Walmart-owned Flipkart is also in the 10-minute delivery space and is on track to have 800 dark stores on its network.
Source: EconomicTimes
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