Flipkart to Limit the Expansion of its Quick Commerce Unit
Reports suggest that Flipkart, the e-commerce giant owned by Walmart, is restricting the growth of its quick commerce division, Flipkart Minutes, to the leading six to eight cities in order to control expenses.
Flipkart Minutes, which rivals Eternal-owned Blinkit, Swiggy Instamart, Zepto, BigBasket’s BB Now, and Amazon Now, is now operational in 14 cities and operates a network of over 300 so-called dark stores, or mini warehouses.
The goal is to increase this to approximately 500-550 by October. In April, Flipkart group CEO Kalyan Krishnamurthy stated that Minutes would reach 800 stores by the end of this year.
Over 90 percent of the quick commerce volumes originate from the leading eight cities, with a significant portion coming from Delhi-NCR, Mumbai, and Bengaluru, where Flipkart is expanding its Minutes offering.
With this change, Flipkart aligns with its Bengaluru counterpart Swiggy, in adopting a more cautious strategy for growth moving forward, despite Eternal's intentions to aggressively pursue market share even at the expense of near-term profits.
Flipkart intends to grow to 500-550 dark stores before its yearly ‘big billion days’ sale.
Nevertheless, it faces pressure to reduce its monthly cash burn of approximately $40 million (Rs 340-350 crore) by half over the coming quarters as part of its IPO launch strategy.
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Last month, Flipkart’s board approved the firm’s plan to move its domicile from Singapore to India, in preparation for a proposed IPO in 2026. The ongoing process began nearly a year after Flipkart secured $350 million from Google in a $1 billion funding round that Walmart led.