Delhivery and Xpressbees Considering Entry into Quick Commerce Amid Surging Demand: Report

Delhivery, based in Gurugram, is expanding its footprint in quick-commerce by managing larger warehouses for Swiggy Instamart's supply chain. Additionally, Delhivery has announced the establishment of a subsidiary, Delhivery Robotics India, focusing on drone manufacturing and freight air transportation services. The Indian quick-commerce sector saw a significant 77% year-on-year growth in gross merchandise value, reaching $2.8 billion in 2023, reflecting robust market demand and expansion opportunities.

Boston Brand Media looked into the reports from Economic Times (ET), logistics startups Delhivery and Xpressbees are expanding their operations beyond traditional ecommerce orders to cater to the growing demand in the quick commerce sector. This shift is largely driven by the emergence of players like Blinkit, Zepto, Swiggy, and Instamart.

Specifically, Gurugram-based Delhivery has begun managing larger warehouses for Swiggy Instamart, which in turn supply small dark stores or fulfilment centres located in various city pockets. This strategic move reflects Delhivery's adaptation to the evolving dynamics of quick commerce, where rapid delivery of essential items is becoming increasingly critical.

The report indicates that Xpressbees, in addition to Delhivery, is exploring opportunities to enter the quick commerce sector. This move comes amidst a surge in demand driven by platforms like Blinkit, Zepto, Swiggy, and Instamart, which prioritize rapid delivery of essential items.

Founded in 2011 by Sahil Barua, Mohit Tandon, Bhavesh Manglani, Suraj Saharan, and Kapil Bharati, Delhivery is a prominent player in transportation, supply chain, and logistics. It competes with firms such as Xpressbees, Blue Dart, Ekart Logistics (Flipkart), and Amazon Shipping.

Xpressbees, established in 2015 after separating from ecommerce giant FirstCry, operates across more than 20,000 pin codes in India. The company achieved unicorn status in January 2022 following a $300 million funding round led by Blackstone Growth and TPG Growth. Xpressbees specializes in B2B and B2C express delivery services, cross-border logistics, and warehousing solutions, primarily catering to ecommerce clients.

The growing prominence of quick commerce has prompted logistics providers to seize opportunities, recognizing the need for robust infrastructure and expertise to support these platforms effectively. This strategic shift underscores the evolving landscape of logistics in response to changing consumer demands and market dynamics.

Boston Brand Media also found Delhivery is intensifying its collaboration with Swiggy Instamart to broaden their partnership, focusing on handling diverse stock keeping units (SKUs) as major players in the sector expand their offerings. This move reflects Delhivery's strategic push into the quick commerce segment amid rising demand for instant delivery services.

In May, Delhivery announced the establishment of Delhivery Robotics India, a wholly-owned subsidiary aimed at manufacturing drones and providing freight air transportation services. The company disclosed in an exchange filing that its board has approved an initial authorized share capital of INR 5 crore for this subsidiary.

The quick commerce sector in India has witnessed significant growth, prompting various players to diversify their product offerings. Mukesh Ambani's Reliance Industries Ltd has reportedly planned an entry into this segment to compete with Blinkit, BigBasket, Swiggy Instamart, and Zepto.

Competitors like Blinkit, Zepto, and Swiggy Instamart are expanding their quick commerce capabilities by introducing new categories such as sports and fitness essentials, packaged food, and beverages. Walmart-owned Flipkart is also gearing up to launch quick commerce services in Delhi, Bengaluru, and Mumbai, while Tata Digital's BBnow is considering substantial investments in this space.

A recent report highlights the rapid growth of the Indian quick commerce industry, with its gross merchandise value surging 77% year-on-year to $2.8 billion in 2023. This growth trajectory underscores the sector's increasing importance and the fierce competition among players to capture market share in the burgeoning instant delivery market.

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Source: Inc42