Behind the Scenes: How Zepto, Swiggy Instamart, and Blinkit Operate — Impact on Local Markets

Quick commerce platforms like Zepto, Blinkit, and Swiggy Instamart have revolutionized urban grocery shopping in India. While these companies promise speed and convenience to consumers, their operational models significantly affect local markets. Let’s dive into how these businesses operate and analyze their advantages and disadvantages on local markets.

How They Operate

Zepto’s B2B Licensing Model

Zepto, founded by Aadit Palicha and Kaivalya Vohra, operates under a business-to-business (B2B) licensing structure. Its parent company, Kiranakart Technologies, sources products directly from brands and sells them to a small group of licensee firms—Geddit Convenience, Drogheria Sellers, and Commodum Groceries. These firms sell the products on Zepto’s platform under a licensing agreement.

Blinkit’s Marketplace Model

Blinkit employs a marketplace model, where intermediaries like Hands On Trade and 90Minutes Retail procure products from brands and supply them to B2B wholesalers. These wholesalers, in turn, distribute products to business-to-consumer (B2C) sellers listed on Blinkit.

Swiggy Instamart’s Hybrid Approach

Swiggy Instamart’s operations resemble Blinkit’s marketplace structure but with an added layer of dark store operators. B2B wholesalers supply goods to these dark stores, which serve as hyperlocal fulfillment centers, ensuring quicker deliveries to B2C sellers listed on the platform.

Also Read: Why Dmart Isn’t Joining the 10-Minute Quick Delivery Race: Expert Insights

Impact on Local Markets: Advantages and Disadvantages

Advantages

Increased Consumer Convenience:

The fast delivery models cater to the growing demand for instant groceries, saving time for consumers.

Boost for Brands:

By sourcing directly from brands, platforms like Zepto create new distribution channels, offering visibility and higher sales volumes.

Job Creation:

These platforms generate employment opportunities for delivery personnel, warehouse operators, and local wholesalers.

Market Modernization:

The introduction of structured supply chains improves logistics and reduces inefficiencies in traditional retail systems.

Disadvantages

Pressure on Local Kirana Stores:

Local grocery stores often struggle to compete with the discounted prices and faster delivery services offered by these platforms.

Erosion of Local Wholesalers:

Platforms relying on direct brand sourcing reduce the role of traditional wholesalers, impacting their livelihoods.

Consolidation of Power:

The dominance of quick commerce platforms could lead to monopolistic practices, squeezing out smaller market players.

Environmental Concerns:

The need for faster deliveries often results in higher fuel consumption and packaging waste, contributing to environmental degradation.

Key Takeaways

Zepto’s B2B Licensing Model gives it control over quality and pricing but limits competition within its ecosystem.

Blinkit’s Marketplace Model supports broader participation but can be harder to regulate, potentially affecting product consistency.

Swiggy Instamart’s Hybrid Approach ensures speed but comes at a higher operational cost due to its reliance on dark stores.