Mint Primer: Can Blinkit & co challenge Amazon in electronics?

Learn about expensive gadgets in 10 minutes. Does it make sense?

Apparently yes. At its core, delivering goods worth hundreds of thousands of dollars in minutes is marketing. Rapid commerce is a highly competitive and razor-thin industry due to growing demand in urban India. Therefore, for most companies, a large marketing budget will only reduce profitability. At this point, selling expensive but popular gadgets can make for an effective marketing campaign that ultimately leads to indirect sales. It’s similar to e-commerce giant Amazon teaming up with German-owned British carmaker Mini Cooper to offer door-to-door delivery of expensive hatchbacks.

Why is this type of activity important?

Express Commerce was met with skepticism when it was launched. But it has become a major revenue driver for the company. However, most of the items sold by Zomato’s Blinkit, Swiggy’s Instamart, unicorn startup Zepto, etc. are low-value, low-margin items. With expensive electronics at their disposal, these businesses are looking to diversify into higher value products, which will be key to future profitability growth and overall business model sustainability. Flipkart, on the other hand, has started monetizing at a rapid pace and Amazon is about to do the same, forcing the industry to prepare for the impact that wealthy rivals may have on the industry.

Has this strategy been used in marketing before?

E-commerce has sold valuable headphones $140,000, TV value $10 lakhs and gold bars. Q-comm sees electronics as a viable business – iPhones, for example, can grow order sizes exponentially. This has led to a rapid growth in trade, selling items such as external drives, kitchen appliances, Lego and Hot Wheels toys. They attract attention and also help boost profits.

Will this impact Amazon, Flipkart?

It’s possible, yes. Experts say express commerce could replace traditional e-commerce through a widely distributed network of small warehouses. This will require companies like Amazon to also embrace faster delivery, which they are already doing. The result will be the emergence of more online retailers of electronics, with Amazon and Flipkart enjoying a duopoly. This could trigger a new battle for customers. While Amazon or Flipkart may not fail, they will certainly face more competitors.

Is this sustainable for fast business?

Most advertised electronic products are short-term marketing bursts. Search for iPhone 16 or PS5 on Blinkit and you won’t find them. This is because the success of express commerce depends on items moving quickly, thus reducing warehousing costs. In the short term, fast commerce will continue to sell gadgets only when they make headlines. This also benefits local electronics stores. In the long term, the merger of traditional e-commerce and express commerce may change the viability of the business.