Dhanteras fatafat: What's behind the 10-minute gold rush?

A large number of people must have planned to buy gold on Dhanteras, not just because it's an auspicious occasion for such a purchase but also because gold has been on fire as equity markets fluctuate. Gold has given a whooping 30.6% returns in just a year from the previous Dhanteras, and 56.8% since Dhanteras in 2022. And it has become far easier to buy gold for common people.

Quick-commerce platforms Blinkit, BigBasket and Swiggy Instamart are now delivering gold and silver coins in just 10 minutes. Given the rally in gold prices and stock markets likely to correct, these platforms must have expected high demand for gold among common buyers on Dhanteras. Reportedly, BigBasket has collaborated with Tata-owned jeweller Tanishq; Swiggy Instamart has teamed up with Malabar Gold & Diamonds, Muthoot Exim and Jar; and Blinkit is delivering coins from Malabar Gold & Diamonds and Joyalukkas.

The 10-minute gold rush

When quick commerce gained shape in India during the Covid pandemic, a large section of the industry had written it off. Their argument was that Indian consumers were not going to pay convenience fees, no matter what. Some even insisted that consumers would happily wait for a few hours or even a day, if that meant they would get their orders delivered free. Today, one after the other, leading FMCG companies in their 2023-24 earnings report state that quick commerce is now not just their fastest growing channel, it is what is driving their e-commerce business growth itself, ET has reported.

The latest 10-minute gold rush comes when quick commerce firms are trying to diversify into new products. The companies which became popular for delivering groceries and other essential items within minutes are now venturing into delivery of high-value goods too. Last month, Zomato-owned Blinkit and BigBasket’s BBNow delivered the newly launched iPhone 16 in cities such as Delhi NCR, Mumbai, Pune and Bengaluru on the very launch day of the new series when people usually queue up to buy iPhones.

As consumer habit for speed and convenience hardens, quick commerce firms eye delivery of bigger and more expensive products. They are already delivering small appliances and electronics.

The quick commerce market in India is currently valued at $3.34 billion and is projected to reach $9.95 billion by 2029, growing at a compound annual growth rate (CAGR) of more than 4.5 per cent over the forecast period (2024-2029).

Quick commerce companies spot a huge opportunity in the kitchen and small appliances segment, apart from handsets, television sets and microwave ovens, where e-commerce accounts for 35-45% of sales, according to industry executives. They are also planning to deliver white goods such as washing machines and refrigerators.

While they have already impacted small neighbourhood kirana stores and modern retail, quick commerce companies are now trying to compete with e-commerce platforms, especially when they are gearing up to deliver white goods. Blinkit, Swiggy Instamart and Zepto have rolled out features like equated monthly installments (EMI), postpaid options and 10-minute returns for clothing and footwear to outcompete e-commerce firms. Blinkit has launched its seller programme called Seller Hub on the lines of ecommerce giant Amazon's FBA (fulfilled by Amazon),

More and more brands are starting to get on to the quick commerce bandwagon. Fabindia, Decathlon, Adidas, U.S. Polo Assn., Hamleys and BoAt have started offering their products on these platforms.

The 10-minute delivery of gold coins on Dhanteras indicates quick commerce firms are ready to gobble up all available retail spaces and products. The promise of quick commerce is drawing big corporates too. Tata is entering quick commerce with Neu Flash while Reliance is also reportedly considering this opportunity.

Speed bumps for quick commerce?

The latest 10-minute gold rush shows quick commerce firms are charged up to keep expanding at a breakneck speed. However, it could run into several speed breakers.

A recent report by JM Financial points out that more than three-four big players in quick commerce space appear unsustainable. Quick commerce players may have realised that they can't keep growing solely by offering convenience. They have been accused of offering deep discounts. Recently, All India Consumer Products Distributors Federation (AICPDF), which represents 400,000 retail distributors of major companies including Nestle and Hindustan Unilever, has written to the Competition Commission of India (CCI) that quick commerce firms were practising predatory pricing - or offering deep discounts and selling below cost to lure customers, Reuters has reported.

There are also concerns over viability of the quick commerce model in delivery of products which face high returns and 10-minute delivery of white goods which might pose complex logistic problems.