In an exclusive interview with ET’s Pranav Mukul and Samidha Sharma, Sahil Barua, CEO of Delhivery, sheds light on the evolving dynamics of the logistics industry and the challenges facing quick commerce. Barua discusses how the rapid growth of quick commerce is reshaping market shares, particularly impacting traditional kiranas rather than traditional e-commerce platforms.

Barua highlights that while quick commerce—characterized by ultra-fast delivery times of 10-15 minutes—has revolutionized the grocery and fast-moving consumer goods (FMCG) sectors, the economics behind such swift deliveries may not be sustainable across other categories. He anticipates that as the true costs of rapid delivery become clearer, the delivery timelines will likely extend beyond the current super-fast promises.

Quick Commerce’s Market Impact

Delhivery, a new-age logistics company, has observed a notable shift in market dynamics. Barua points out that quick commerce is encroaching on the market share of local kiranas (small neighborhood stores) more than on established e-commerce giants. This shift is primarily due to the convenience and speed offered by quick commerce, which appeals to consumers seeking immediate access to everyday essentials.

While traditional e-commerce platforms have long dominated online retail, quick commerce’s emphasis on rapid delivery has introduced new competition for local kiranas. The quick commerce model’s ability to deliver products in minutes has elevated consumer expectations and created a new standard for convenience.

Challenges and Sustainability

Despite the apparent success of quick commerce, Barua warns of potential sustainability issues. The economics of maintaining such fast delivery times can be challenging, especially as the model scales to include a broader range of products beyond groceries and FMCG items. The operational costs associated with rapid delivery, including logistics and inventory management, may prompt adjustments in delivery times.

Barua suggests that as the cost implications become more apparent, there will be a natural shift in delivery timelines. Consumers may see delivery times extend as companies balance the need for speed with economic viability.

Delhivery’s Strategic Moves

Amid these industry shifts, Delhivery is focusing on strategic expansions to adapt to the changing landscape. The company has recently reported a return to profitability for the April-June quarter. In response to the evolving market, Delhivery is launching a network of shared dark stores. These dark stores will serve brands and e-commerce players, enhancing efficiency and scalability.

Shared dark stores are facilities dedicated to fulfilling online orders, often stocked with inventory for multiple brands. This approach aims to streamline operations and reduce delivery times while accommodating the growing demands of quick commerce.

Future Outlook

As the logistics and e-commerce sectors continue to evolve, Delhivery’s strategic initiatives will play a critical role in shaping the future of delivery services. The company’s focus on integrating shared dark stores and adapting to quick commerce trends reflects its commitment to remaining competitive in a rapidly changing market.

In summary, Sahil Barua’s insights underscore the complex interplay between quick commerce, traditional kiranas, and e-commerce platforms. While quick commerce offers significant advantages in terms of speed and convenience, the long-term sustainability of such rapid delivery models remains a key consideration. Delhivery’s innovative approaches, including the introduction of shared dark stores, are poised to address these challenges and drive future growth in the logistics sector.