Ola forays into quick commerce, to expand dark stores to 20 cities

India's quick commerce market has a new entrant—Ola. The Bhavish Aggarwal-led mobility startup on Friday officially announced its foray into the instant delivery space with the launch of Ola Dash that will offer consumers a wide array of products including selection of fresh produce, snacks, beverages, instant food, home care products and cooking essentials.

To be sure, Ola has been running the quick commerce service across nine Indian cities including Mumbai, Delhi-NCR, Bengaluru and Pune under the brand name Ola Store for sometime. The company has now rebranded the service as Ola Dash. In a statement, the firm said that Ola Dash plans to expand its dark store network to 500 dark stores from the earlier 200 in the next six months. The service will also add 11 new cities to its network, taking the total city count to 20.

Ola Dash deploys a ‘store to door’ strategy, delivering items to consumers in 10 minutes. Ola said that it aims to grow the business, taking the order size to more than 500,000 per day by the year end. “Our quick commerce service is an essential part of our connect with customers as they rely on technology and online service to fulfill their daily needs,” says Anshul Khandelwal, chief marketing officer at Ola.

The concept of quick commerce or delivery of everyday essentials to consumers under 30 minutes is increasingly gaining traction in India where the share of the earning population is led by the millennials who are always looking for convenience. With the pandemic already having fuelled online shopping, companies are leveraging the opportunity to create new use cases and grab market share. Big players like Swiggy (via Instamart) and Blinkit (formerly Grofers) are aggressively investing in the quick commerce space while Dunzo got an edge in the game with the backing of Reliance Retail which infused a chunky $200 million into the startup. The space has also accommodated fledgling startups like Zepto which already managed to garner a valuation of $570 million and a collective funding of $160 million since its launch in June last year.

The announcement by Ola comes in a week when rival Swiggy raised a fresh $700 million in funding, joining the 'decacorn club' – privately-held companies valued at $10 billion or more. Portions of the capital will be used to grow the Instamart business. “The GMV (gross merchandise value) our food delivery business achieved in 40 months, took Instamart just 17 months, demonstrating the platform benefits of Swiggy," Sriharsha Majety, co-founder and chief executive at Swiggy had said. Swiggy has earmarked investments worth $700 million for Instamart alone.

Analysts at market research firm RedSeer Consulting estimate the Indian quick commerce market to touch $5 billion by 2025 from $0.3 billion currently. “With high fill-rates and 30-45 minute delivery service for unplanned orders, mid to high income households in the metros are increasingly replacing traditional kiranas with Q-commerce platforms,” they say.