Swiggy to launch InstaMart, chain of virtual convenience stores
Swiggy, the food delivery app, is set to launch InstaMart, which is a chain of virtual convenience stores to deliver grocery and household items. This venture comes at a time when e-commerce companies are booming amid lockdowns and restrictions due to the ongoing COVID-19 pandemic. And consumers feel more ‘safe’ shopping online.
As the e-commerce sector expands with new players such as Reliance JioMart and existing players Amazon, Flipkart and BigBasket already having a foothold, the competition will be fierce.
Reports said Swiggy plans to offer 2,500 items from its partner dark stores, which do not have walk-in locations and exist only on apps. “With 30-45 minutes deliveries day and night serviceability (7 am -12 am), a wide assortment across categories such as instant meals, snacks, ice-creams, fruits and vegetables, InstaMart will address the unmet grocery needs of the time-pressed, convenience-seeking urban consumer,” a Swiggy spokesperson said. The company already operates Swiggy Stores which lists products from nearby local stores. Through InstaMart, Swiggy is expected to give it tighter control over the delivery experience and product selection.
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An investor told ET that for Swiggy, the bet on grocery delivery is happening when its core food delivery business is recovering slowly, to only 50 per cent of pre-COVID-19 levels. He said the InstaMart launch would give the company better margins from brands and newer monetisation opportunities like banner ads in future. “The biggest monetisation perspective is that this model offers a direct 15 to 17 per cent gross margin on products plus the opportunity to monetise brands, compared to marketplace commissions which are close to 4 to 5 per cent,” the investor said.
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Moreover, as COVID-19 pandemic shows no sign of slowing, the market opportunity for e-commerce is increasing. In June, industry insiders had said that the epidemic is expected to help uplift India’s e-commerce market almost threefold to about $85 billion by 2024, despite other sectors being impacted severely.