While reflecting retailers’ shift for the new-age channel beyond the metros, almost a third of quick-commerce dark stores in India are presently located in tier-2 cities and smaller towns.
Dark Store Boom In India
It appears that the surge in dark stores is part of a broader trend in India’s quick-commerce market and it has grown at an unprecedented pace in recent years.
Moving ahead, the total number of dark stores is projected to nearly triple to 7,500 by 2030 considering the demand for ultra-fast delivery which was about 2,525 as of October, according to data from property consultancy Savills India, reportedly.
It’s good news as this growth presents a significant opportunity for property developers and investors as they can invest in this rapidly expanding sector.
Moreover, Savills noted “Tier-1 and 2 cities will lead this expansion, while tier-3 cities will emerge as high-potential markets, with secondary and suburban micro markets playing a key role in balancing cost and accessibility,” in a report.
India Leading Quick Commerce Wave
The market is expected to expand nearly three times to 38 million sq ft from 13 million in terms of total area as businesses seek to cater to booming demand for ultra-fast delivery.
When it comes to India, the country’s dominance in this sector is underscored by growth across the entire Asia-Pacific region as it remains the largest and fastest-growing market for quick-commerce globally.
In simple words, countries such as China and India are leading the quick commerce wave considering their huge consumer bases, advanced delivery networks, and increasing smartphone penetration.
The chief financial officer of Eternal, the parent of Blinkit, Akshant Goyal said, “More than 70-75% of our store additions continue to be in the top 10 cities. While the number of cities is expanding, the number of stores in long-tail cities remains relatively small. So, the business’s success is still tied to how well we perform in the top 8 to 10 cities,” during a recent investor call.
Last year, Eternal alone added around 1,200 dark stores.
Moving ahead, Savills said “the demand for opening dark stores is continuing to outstrip supply, with a notable 50% gap between required and operational spaces, so it offers a major opportunity to property developers and investors looking to capitalize on this fast-growing sector.”
The Unilever global CEO Fernando Fernandez earlier this year said he expects quick commerce to contribute 10-15% sales in India in the next three-four years, from 2-3% currently.
Further adding, “India is a very special place because richer Indians and poorer Indians live in close proximity that basically provide demand and supply of labour, making quick commerce a logical channel to grow.”
He further emphasized that the mix in the channel is better and favourable for margin improvement.
The dark stores are typically focused on larger cities where traffic congestion and delivery time constraints limit store distribution, said Dinesh Taluja, chief financial officer, Reliance Retail, said during the company’s September earnings call.
He said that Reliance also operates more than 3,000 grocery stores, filling in gaps in the network where dark stores are not yet viable.
According to Taluja, “In bigger cities, you cannot go beyond one to two kilometres for delivery because of traffic. So, dark stores are focused on filling those network gaps, particularly in dense locations where delivery expectations are high.”
So far, the National Capital Region (NCR) including Delhi, Gurugram, Ghaziabad, Noida, and Faridabad has the largest concentration with 400 dark stores.
The other cities like Bengaluru have 360 stores, Mumbai have 250 stores, and Chennai have 190.
