Beyond expansion: Quick commerce seeks more growth from existing assets

Even as they continue adding dark stores, quick-commerce firms are focusing on higher utilisation of their existing assets, better unit economics and improved margins

India's quick-commerce companies have spent the past few years racing to expand dark-store networks, enter more neighbourhoods and promise ever-faster deliveries. But that strategy may now be evolving.

 

According to estimates by Bernstein, the country's five largest quick-commerce players added nearly 900 dark stores between April and July, with Blinkit adding 289 stores to take its network to 2,511. Flipkart Minutes added 262 stores, crossing the 1,000-store mark, while Amazon Now nearly doubled its footprint to an estimated 600-700 dark stores. Swiggy's Instamart, meanwhile, operated 1,171 dark stores across 131 cities at the end of the June quarter and plans to add another 75 stores during the September quarter.

 

 

However, alongside network expansion, companies are increasingly seeking to raise the productivity of each store and improve unit economics. Swiggy recently said its existing Instamart network can support more than double its current gross order value (GOV) without significant expansion by increasing the operational efficiency of its dark stores already in place. It plans to widen its product assortment and encourage customers to place larger orders through initiatives such as Maxxsaver.

How can quick-commerce firms improve dark-store utilisation?

Until recently, success was measured largely by the number of dark stores opened, the number of pin codes catered to and the pace of customer acquisition. Those investments helped companies rapidly expand their reach and establish nationwide networks.

 

Now, the challenge is making those networks more productive.

 

"Our analysis indicates that quick commerce has evolved from being a delivery-speed proposition to a demand-shaping retail channel. As the network matures, profitability is increasingly linked to disciplined assortment management, high-frequency replenishment, monetised digital shelf space and efficient last-mile execution rather than footprint expansion alone," Naveen Malpani, partner at Grant Thornton Bharat, told Business Standard.

 

According to Malpani, while geographic expansion will continue in underserved micro markets, companies can improve their economics by increasing the number of orders processed every hour, handling more orders every day, raising average basket values, expanding product assortment, improving warehouse picking efficiency and increasing delivery density. These measures allow fixed infrastructure costs to be spread across more orders, improving profitability without proportionately increasing capital expenditure.

 

According to the consulting firm Redseer's estimates, India's quick commerce market has crossed ₹11,000 crore in monthly Gross Merchandise Value (GMV), growing about 100 per cent year-on-year, with non-grocery categories contributing an increasingly larger share of sales, reflecting changing consumer behaviour beyond emergency grocery purchases.

Operational execution is becoming increasingly important

Malpani believes three additional operational levers will increasingly separate winners from the rest:

 

- smarter assortment optimisation by focusing on fast-moving products while continuously removing slow-moving inventory.

- basket expansion by encouraging consumers to combine routine grocery purchases with impulse buying, thereby increasing average order values without materially raising fulfilment costs.

- warehouse productivity through faster picking, better inventory accuracy and improved replenishment planning.

 

He also identified advertising and monetised digital shelf space as an emerging source of high-margin revenue that does not require additional physical infrastructure.

Investor focus shifts to capital efficiency and unit economics

According to Malpani, during the industry's early expansion phase, metrics such as dark-store additions, city expansion and GMV growth dominated investor presentations. As networks mature, analysts increasingly expect attention to shift towards measures that reflect capital efficiency and unit economics. These include GOV generated per dark store, orders processed per store, contribution margins, asset utilisation, inventory productivity, fulfilment efficiency, customer retention and return on invested capital.

 

Redseer says India's quick commerce sector has evolved from being a convenience-led grocery proposition into an increasingly important retail channel for brands, with categories such as beauty, home products and general merchandise becoming larger contributors to sales. As product assortment widens and repeat customer behaviour strengthens, profitability will increasingly depend on operational execution rather than network expansion alone.