5 Minutes Read
A big win for Quick Commerce
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
World over, Qcomm boomed during the pandemic, and it’s cooled off since then. That’s not the case in India. Indian QComm market in just the top 50 cities alone was worth $150 billion in 2023.
Quick commerce has grown to be latest channel of choice for India, everyone’s just surprised by the pace at which all of us have taken to it.
A large unorganized grocery sector with high density of population in urban areas along with favorable ratio of delivery costs to AOVs has just been the magic potion.
World over, Qcomm boomed during the pandemic, and it’s cooled off since then. That’s not the case in India. Indian QComm market in just the top 50 cities alone was worth $150 billion in 2023.
In fact, Blinkit doesn’t sell just groceries, but also added apparel (India World Cup Jerseys), electronics, Gold Coins, smartphones and even the latest PlayStation to its soon expanding list of offerings.
A sharp surge in AOVs and Volumes for both Zepto and instamart have been witnessed as well.
Shareholders of Zomato have been positively surprised by the growth and Unit Economics of Blinkit more than the food delivery business. In his latest letter to shareholders, Deepinder Goyal did say “Blinkit would drive more value for shareholders in the next 10 years than Zomato”
The big win for QComm this morning has come from the house of Goldman Sachs. In a first, GS have valued Blinkit at ₹119 per share as against Zomato’s value at ₹98 per share, in their latest note.
Most analysts, business owners, commentators and customers alike hadn’t expected the pace at which Q Comm would grow. Goldman Sachs said, their estimates of GOV growth for Blinkit is now 50% higher than what it was just a year ago.
They now expect Blinkit GOV to compound at 53% over FY24-FY27e, much higher than the 38% growth expected for India’s Online Grocery Market.
In fact, in March 2023, Goldman Sachs’ estimated value of Blinkit/share was ₹16.
It has surged by 7 times in less than 1 year. GS values it at $13 billion now, more than 20X the value of $600 m at which Zomato acquired it in 2022.
The biggest win however, is for customers, investors and the entire eco-system of sellers who have unlocked a new growth engine in the ever evolving consumer market of India.
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