WHAT IS THIS ‘MIDNIGHT GROCERY DELIVERY’ WAR?

Swiggy Instamart, the grocery delivery arm of restaurant delivery and search aggregator Swiggy, has extended grocery delivery to the early hours in select markets--a first for the grocery industry. Grocery e-commerce platforms are looking to open up a new battlefront--night delivery.

“We’re now open till 3 am… Get all your 3 am needs taken care of,” Instamart mentioned in messages sent to customers over the weekend. The SoftBank-backed grocery service said it had witnessed a 16-fold growth in orders in the 12 months to June, with Bengaluru, Mumbai, Hyderabad and Chennai topping the list.

A Swiggy spokesperson mentioned, “Swiggy Instamart has been operational in over 25 cities from 7 am to as late as 1 am. With the help of the store owners and our delivery partners, we are extending our operational hours further in some cities (subject to municipal rules) based on customer requests, giving them access to over 5,000 products, and addressing everything from late-night cravings to emergency purchases.”

A few cities are piloting round-the-clock delivery with Zepto, which is backed by Y Combinator.

“We are delivering till 1 am across all 10 cities and are now piloting 24x7 deliveries. It’s still early days, but we are seeing consistent growth in late-night order volumes,” a Zepto spokesperson said.

As a result of their dark or small delivery-only stores that act as warehouses, quick-commerce companies lead the night-delivery business since they can deliver products to homes within 15-30 minutes, industry executives said, without relying on external sellers. The key is whether it is sustainable, they said.

“Data collection is at the core of this business model, with crucial information about where your customers are and what their order preferences are at what time of the day or night,” Wazir Advisors managing director Harminder Sahni said. “Young people joining the workforce would be key consumers for late-night ordering.”

“We are seeing a decent part of our order volumes come up late in the night as well,” said Mrunmayi Oke, head of revenue at Reliance backed Dunzo. “The deliveries happen almost round the clock, for example, in cities like Mumbai, Pune and Delhi we deliver groceries up to 2 am. We want to be there for our customers when they crave for that midnight snack, dessert or beverages. Currently, a large part of our target audience are the millennials and GenZ who usually end up ordering at night.”

According to industry executives, Zomato-backed Blinkit is also considering extending the delivery window beyond 7 am to 11 pm. No response was received from Blinkit.

“Orders would be few for late-night deliveries but in clusters such as call centres, where people work till very late, this would be a benefit,” said an executive at a packaged foods company.

Several companies, including Coca-Cola, Nestle, and Adani Wilmar, have said that formats such as quick commerce are fueling grocery e-commerce. On shorter-duration deliveries, bill sizes are smaller, but volumes tend to grow faster month-over-month, as consumers make impulse, unplanned purchases.

Customers of Reliance JioMart can now order groceries through WhatsApp, further driving online grocery growth, according to industry executives.

“This is our first-ever end-to-end shopping experience on WhatsApp—people can now buy groceries from JioMart right in a chat,” Meta CEO Mark Zuckerberg said in a statement. “Business messaging is an area with real momentum, and chat-based experiences like this will be the go-to way people and businesses communicate in the years to come.”

Currently, India is the fastest-growing market for express grocery delivery, ahead of China, according to a Redseer report. According to the report, the Indian quick commerce market is valued at $700 million and is expected to grow 15 times to $5.5 billion by 2025. Instant delivery has taken off during the Covid-19 pandemic, accounting for 13% of the online grocery industry $5.5 billion.