In a massive quick commerce push, Swiggy has earmarked investments worth $700 million for its express grocery delivery service Instamart. Swiggy Instamart—which claims to have already garnered about two million transacting users—now plans to make deliveries in 15 minutes by widening its network of dark stores. The strategy is to make swift 15-minute deliveries at least in the top cities by January 2022.
Swiggy Instamart, which launched operations in August 2020, with two markets Gurugram and Bengaluru initially made deliveries within 30-45 minutes. As the service gained traction, the company prioritised making deliveries within 15-30 minutes. Currently, Instamart services 18 Indian cities, and fulfils more than one million orders per week. The platform offers an assortment of products across categories ranging from fresh fruits and vegetables to personal and baby care.
The move to expedite deliveries comes amid growing competition in the space. While the quick commerce segment has seen the entry of new players like Zepto, which has already expanded to five cities within months of launch; established companies like Grofers is betting big on the category. Grofers is aggressively pushing its 10-minute delivery strategy. According to a study by market research firm RedSeer Consulting, the quick commerce market in India has the potential to touch $5 billion by 2025.
Swiggy Instatmart has on-boarded more than one seller-run dark store every day in the last few months, the company has said.
Swiggy had earlier this year raised $1.25 billion in funding led by SoftBank Vision Fund 2 and Prosus at a valuation of $5.5 billion. The company had then said that a considerable portion of the capital will be deployed to power the growth of its non-food verticals like grocery. The company is reportedly close to raising another $600-$700 million in funding.
“At our current growth trajectory, Instamart is set to reach an annualised GMV run rate of $1 billion in the next three quarters. With our food delivery business trending at a $3 billion annualised GMV run rate, and Instamart’s super-charged growth, we’re very excited about our convenience mission coming to life in a very big way,” says Sriharsha Majety, CEO, Swiggy.