Reliance investment in Dunzo shows importance of q-commerce in India
Reliance Retail last week acquired a 25.8% stake in Google backed hyperlocal delivery Indian startup Dunzo for $200 million.
The deal will not only enable Reliance to synergise its retail footprint with last mile connectivity but also help to improve delivery capabilities to support the growth of its operations, according to GlobalData.
The TATA Group’s acquisition of a majority stake in online grocer BigBasket in 2020 was one of the first major deals in the sector.
Other players such as Zepto have been raising funds at high valuations to fund their expansion plans.
Zepto’s latest $100 million funding round takes the company valuation to $570 million.
Swiggy, a major player in the online food delivery space, is also aggressively expanding its Instamart services with an investment of $700 million, while Zomato backed Grofers recently rebranded itself as ‘Blinkit’ to better reflect the q-commerce service model.
Parthasaradhi Reddy, Consumer Analyst at GlobalData, says: “The Covid-19 pandemic accelerated the e-commerce and delivery services market in India.”
“According to GlobalData Q4 consumer survey, 70% of surveyed consumers stated that they prefer shopping online, and among these, 21% of the respondents stated that they have started doing this in the last three months.”
“The increased activity in the sector reflects the changing attitude of consumers towards online shopping.”
Online shopping for groceries in India has been growing rapidly since the onset of the pandemic, with e-retailer sales of groceries skyrocketing by 166% from $1.4 billion in 2019 to $2.3 billon by 2020.
Reddy concludes: “Vendors in the instant delivery/q-commerce sector are adopting different logistics and warehousing strategies to ensure ever faster deliveries.”
“For instance, Blinkit and Zepto target a delivery time of less than 10 minutes; while Swiggy and Dunzo promise to deliver in under 20 minutes, and BigBasket promises to deliver in under 45 minutes.”
“This will usher in a new era in delivery services in a country where logistics is the least efficient spoke in the supply chain.”
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