Quick-com expands Tier-II ops ahead of festival season

Experts highlight challenges as these firms operate on thin margins, relying on high order frequencies and higher average order values

- ARYAMAN GUPTA

After making the model work in metro cities, players in the quick commerce sector are rapidly expanding their footprint into smaller Tier-II cities and markets beyond that ahead of the festival season.

This past week alone, Swiggy's quick delivery arm Instamart has entered six new cities, launching in a new market every 33 hours. The firm has entered 11 new cities over the past two months, including Thrissur, Mangalore, Kanpur, Udaipur, Warangal, Salem, Amritsar, Bhopal, Varanasi and Ludhiana. Instamart now operates in a total of 43 cities.

Zomato-owned Blinkit has also been on a similar expansion journey. Over the past two weeks, Blinkit CEO Albinder Dhindsa has announced the company's foray into cities like Kochi, Bhatinda, Haridwar, and Vijayawada.

Meanwhile, Mumbai-based Zepto flush with funds after raising over $1 billion over the last year - had announced plans to enter ten new cities, up from the top 10 metro cities it already operates in. These include markets like Jaipur, Chandigarh and Ahmedabad.

The Tier-II+ challenge

However, expansion into smaller markets poses its own set of challenges. According to industry watchers, quick commerce firms operate on thin margins, relying on high order frequencies and higher average order values (AOVS) to bolster their margins.