Food delivery company, Swiggy’s IPO can positively impact India’s Quick Commerce (QC) sector in more than one way. The QC segment of the country’s online delivery industry has grown at a phenomenal rate in the last five years. And, the future only looks bright. According to a report of consulting firm RedSeer, India’s QC industry is expected to expand its size to $5 billion by 2025 from $2.8 billion in March 2024. In coming years, the market share of this particular segment in the overall online delivey market is expected to grow to 12-13% by 2025.
How Swiggy Intends To Spend IPO Proceeds On QC Segment?
Swiggy’s IPO comprises a fresh issue of equity shares worth Rs 3,750 crore and an offer-for-sale (OFS) of 18.52 crore equity shares. The Bengaluru based firm intends to spend Rs 982.40 crore on expansion of its QC delivery business. Lets see how positively will this public issue impact the overall quick commerce industry of the company.
Swiggy’s IPO’s Positive Impact On India’s Quick Commerce Market
- Expansion of India’s Quick Service Market
One, the food and grocery delivery firm will expand the reach of quick commerce (QC) services to deep pockets in India. As it intends to use IPO proceeds to expand its operations, areas where these services are not available, there also people will get to avail off its quick delivery services of Instamart. So, inhabitants of such areas may get to use Instamart or even Zomatos’s Blinkit for the first time as it will raise fierce competition between the two. Zomato will also have to enter such areas to avoid losing market share to the Nandan Reddy founded food delivery app.
2. More Cashbacks, Discounts On Online Deliveries!
As giving cashbacks and deep discounts have almost become a new norm for business enterprises to target new customers, Swiggy is most likely to lure inhabitants with such largesse in new areas where it will start Instamart services for the first time. Not to mention Zomato will follow suit!
The phenomenal growth of QC industry has given birth to many big brands like Big Basket, Zepto, Blinkit, Denzo and offcourse Instamart! Zomato’s Blinkit is the leader in India’s QC market with market share of 45%. The second biggest player is Swiggy’s Instamart (27%) followed by Zepto( 21%.) While, Tata Group’s market share stood at 7%.
The phenomenal growth of QC industry has given birth to many big brands like Big Basket, Zepto, Blinkit, Denzo and offcourse Instamart!
Zomato’s Blinkit is the leader in India’s QC market with market share of 45%. The second biggest player is Swiggy’s Instamart (27%) followed by Zepto( 21%.) While, Tata Group’s market share stood at 7%.
