Daybreak - 10-minute delivery is making Zepto, Swiggy, and Blinkit disrupt themselves

Episode Date: January 13, 2025

2024 was the year of the 10-minute delivery. We think we didn't need it but the likes of Zepto, Swiggy Instamart, and Blinkit proved us wrong. While other companies were struggling to find funding, these quick-commerce companies were raising billions of dollars and reporting double-digit, sometimes even triple-digit annual growth rates.In December, Zomato’s quick-commerce subsidiary, Blinkit made a strategic move in the rapidly growing quick food delivery market space. It launched ‘Bistro’, a platform that will deliver food and beverages within 10 minutes. Interestingly, this was just a day after its competitor Zepto introduced the Zepto Cafe. Swiggy too already has a 10-minute food delivery service called Bolt, and unlike the others, it is inside their original app. Is this just another indulgence or has quick commerce reached a point where players are so paranoid that they’re trying to hold on to customers who think that a food delivery that takes 40 minutes is too slow? Tune in.Also, listen to: Why we date, marry, or breakup with Swiggy Instamart, Blinkit, Zepto & BigBasketTell us what you thought of this episode. You can text us your feedback on WhatsApp at [phone]Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio recording, episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Hi there. So today you're in for quite a treat because I'm going to be reading out a really compelling edition of one of the Ken's most popular subscriber-only newsletters called the Nutgraff by my colleague Praveen Koppal Krishna.

Now, as you know, we've been covering the quick commerce pace extensively on daybreak ever since we started more than two years ago. We spoke about 10-minute delivery apps, how we thought they would never really take off because nobody needed anything delivered in 10 minutes, right? To how 2024 showed us that we were actually quite wrong about that. We even recorded an episode with Praveen himself about our relationship with these delivery apps and it was titled Why We Date, Marry or Breakup

with Swiggy Instamot, Blinkets, Septo and Big Basket. It's personally one of my favorite episodes so in case you missed it, I'll add a link to the show notes of this one so you can tune in later. So we've been witnessing the rise of 10 minute delivery apps for a while and right now, it seems to have reached this really interesting

inflection point where it looks like these apps are disrupting themselves. And this is exactly what Praveen wrote about. So, without further ado, in his own words, here goes. Decades from now, when we look back at 2024, we'll

probably remember it as the year when 10-minute deliveries witnessed a sudden, surprising resurgence in India. All year, as most companies struggle to find product market fits and venture capital, quick commerce companies were raising billions of dollars

without breaking a sweat and reporting double-digit, sometimes triple-digit annual growth rates. A couple of weeks ago, I wrote about how the Quick Commerce Monster demands greater sacrifices and is about to consume categories like pharmaceuticals and alcohol. Well, it turns out that the Quick Commerce Monster is now forcing companies to make the ultimate sacrifice. themselves. In December, Zomato's Quick Commerce subsidiary Blinket made a strategic move in the

rapidly growing quick food delivery market space. It launched Bistro, a platform that will deliver food and beverages within 10 minutes. Interestingly, this was just a day after its competitor, Zepto Introduced Zepto Cafe.

Just so we all understand what is going on, here is the situation. Zomato, the food delivery app owns Blinket, the 10-minute delivery app, which just launched Bistro a 10-minute food delivery app. And Zepto spun out Zepto Cafe their 10-minute food delivery service into a separate app. Lest we forget, Swiggy has also a 10-minute food delivery service. It is called Bold, and it lives inside their original app. Oh, and there is also a hot new 10-minute food delivery app in town and it is called Swish and it recently got a chunk of funding.

One way to think about this is that it is another indulgence. So, has Quick Commerce reached a point where players are so paranoid that they are trying to hold on to customers who think that food delivery that takes 40 minutes is too slow? The CEO of Zomato Dipendor Goel certainly thinks so. Welcome to Daybreak. business podcast from the Ken. I'm your host, Nick Dhaas Sharma, and I don't chase the new cycle. Instead, every day of the week, my colleague Rahal Philipos and I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 13th of January.

Here's what Depender Goil, the CEO of Zomato, said about 10-minute food deliveries. And I'm quoting him, for sure. Blinket is fast. But that has made Zomato seem slow. In some areas, we take 40 minutes to deliver and 40 minutes is very, very slow. So customer expectation is moving and food delivery will have to change. More restaurants will open up close to customer locations or a 10-minute food format, some canteen food kind of format, will come up to meet customer expectations. Think samosas, patties, sandwiches, chai, coffee, nimbo pani, etc. being delivered in 10 minutes.

could be the next frontier which restaurants have not attacked yet. This is canteen-type food but in an organized fashion. It is an interesting space. So this could be the next big thing and this is canteen food for people who do not eat at canteens right now. So it will be a whole new market and additional demand being created. This could be the next big growth engine for restaurants. End quote. It is only fitting that 10-minute food.

deliveries are now eating 40-minute food deliveries. Essentially, QuickCommerce is creating a great positioning reset in India and everybody is paranoid about losing their association with customer needs. I'll explain. Over a decade, multiple e-commerce companies spent hundreds of millions, possibly billions of dollars to educate and tell customers to think of those platforms whenever they wanted something. Flipcard and Amazon trained customers to remember them whenever the urge struck to buy things like electronics, books or appliances. Mintra taught users to recall them when there was a need to purchase fashionable clothes and sneakers. OneMG and Farm Easy created an association within customers who needed to buy medicines. Millions of Indians almost unthinkingly unlock

their phones and open tomato or swiggy whenever they feel like eating something. This is the power of brand association. It is the culmination of innovative, persistent storytelling across channels done over years. This imprint where people associate an emotion or a need with a company is the holy grail. This is brand marketing. When companies do this consistently and repeatedly over years or decades, it makes them practically immune to disruption. Just ask Coca-Cola or a nice thing. to stars Coca-Cola or Nike or Louis Vuittor.

Until early 2024, most Indian e-commerce companies were doing fine as they went down this part. And then, quick commerce came along and upended everything. In brand marketing terms, 10-minute deliveries changed everybody's positioning. Consumers had spent years being trained to think of, say, flip card when they wanted to buy a new mobile phone. but started thinking about Blinket because they would be able to get it in 10 minutes. Want to buy vegetables? People subconsciously opened the Big Basket app only to realize that Zepto would deliver it to them right away. Have a party next week and want to buy a pack of ono cards.

Forget Amazon and open Swiggy Instamot. This is India's great positioning reset of 2024 in online shopping. Around three years ago, when Beacon, Blinket, which was called Grofers at the time, announced that it would start doing 10-minute grocery deliveries. The response from consumers wasn't elation, but outrage. People were surprised and vocally angry that anybody would want anything delivered in less than 10 minutes. They were upset by the pressures that this would place on delivery partners. Elbindar Dinsa, the CEO of Grofers, even had to release a statement for clarification. But it worked. Every

jumped onto the bandwagon and advertised themselves as a 10-minute delivery company. In fact, Swiggy Instamart initially positioned itself as a company with deliveries that reach you within 15 to 30 minutes. By 2024, though, it joined the others and became a 10-minute delivery company. So what happens when delivering in 10 minutes can no longer give you an edge? Stay tuned to find out. So now that delivery time is no longer a differentiator, unless somebody comes along and positions themselves as a two-minute delivery company, the only reason why a consumer would pick, say, a zepto over a blanket is selection. This is why quick commerce companies are fighting

to own specific inventory in their warehouses and an association in the minds of consumers. All through 2024, in catheteries, in categorical. category after category, everyone is fighting to win this. Fresh vegetables, groceries, toys, electronics, mobiles, medicines, pet food and alcohol. And now we are finally at the end. There are no more new categories left to conquer. So, quick commerce companies have decided to try to create associations and categories like food delivery hoping to sway users who automatically.

recall Swiggy and Zomato when they think of their next meal. Quick Commerce apps are widely seen as a virtual version of a Kirana store. But now they're going further. After all, Kirana stores have multiple customer personas. Some users go there on Sundays to buy their weekly groceries. The same customer may go there in the middle of the weekday for a cup of tea, a cigarette, and maybe an egg buff, and then go there again on their way back home to pick up some toothpaste and some shampoo because they just run out. These are the same customers going to

the same Kirana store under different circumstances. Now, customers go to the same Kirana store because of its proximity to where they are. This is what gives one offline store a differentiator over another. It's location. But in a world where all quick commerce dark stores are just 10 minutes away, what is the new differentiator? The only point of advantage is to be the first quick commerce app that the customer thinks of when they want to buy something. Brand association becomes everything. Want to do weekly grocery shopping? Most people will gravitate towards one app. Want cigarettes and a cup of tea. There is another app for that. One toothpaste and shampoo. Here is this other app. There is a future where a customer lands on one app.

when they think of any of these cases. And one company that believes in that future is Swiggy. Swiggy has resolutely doubled down on the idea that it can house all of its offerings in one single app, which it says gives it some advantages, even though it is not clear what these synergies are. Perhaps Swiggy is right. But there is another version of this future. And that is what Zepto and Blinket believe. in, the future where there is one app for a customer need.

Seen through this lens, quick commerce is the driving force behind the ultimate unbundling of the Kirana store because it unbundles the customers themselves. If you understand this, then you understand why Blinket and Zepto are spinning out bistro and cafe as separate apps. In fact, the original rationale behind launching Zepto Cafe was to boost the average order value of grocery purchases on Zepto. Earlier this year, a Harvard Business School case study on Zepto also suggested that it could use Zepto Cafe to increase order value.

The assumption was that customers would add items from Zepto Cafe while making grocery purchases. I don't know this with certainty, but now that Zepto is spinning out its cafe into a separate app, I suspect Zepto has discovered that customers. do not behave like they originally expected. People do not order egg puffs and groceries at the same time. These are distinct purchasing behaviors done at different times with separate retention patterns. Zepto and Blinket would rather take a chance at creating new associations for specific narrow behaviors

by rolling out separate apps rather than figure out how to make customers perform both behaviors in one purchase flow contained in a single app. It is somewhat counterintuitive, but it is bold. And right now, quick commerce companies can afford to take unconventional bets because the risk of playing safe is far too high. That is all for today. Thank you so much for tuning in. And if you like this episode or if you have any feedback for this episode in particular

or our podcast in general, please do write to us on our WhatsApp number. I will add it to the show notes of this episode. And please don't forget to hit follow and rate us on whatever platform you are listening to us on. Thank you in advance. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras.

To subscribe, head to the ken.com and click on the red subscribe button on top of the Ken website. Today's episode was hosted by Snigda Sharma and edited by Rajiv Siyah.