Brief Summary
This episode of The Ken's 2x2 podcast features a discussion on the future of 10-minute delivery services with Madav Kasurya, CEO of Zippy, and Sanjay Ram Krishna, founder of Multiply Ventures. They discuss the evolution of quick commerce, the potential for verticalization (specialized quick commerce), and consumer behavior.
- Quick commerce might not always mean 10-minute delivery; it's about the fastest possible delivery within a category.
- Verticalization is coming, with specialized quick commerce platforms for fashion, pharma, gifting, and furniture.
- Consumer behavior and market forces will ultimately decide the winners in the quick commerce space.
Intro and Guest Introductions
The episode features Madav Kasurya, CEO and founder of Zippy, a company that helps e-commerce brands connect their online stores to quick commerce delivery. Zippy operates in 13 cities, enabling speed for various businesses with a focus on food, beverage, beauty, personal care, and fashion, using Zippy-operated dark stores and last-mile fleets. Sanjay Ram Krishna, founder and general partner at Multiply Ventures, an early investor in consumer tech, also joins the discussion. Multiply Ventures has invested in Slick Club and is keenly observing the quick commerce landscape.
The Evolution of Quick Commerce
The hosts and guests discuss how consumer perception of quick commerce has changed. Initially, there was skepticism about the demand for 10-minute deliveries, but now, people are buying everything from groceries to air conditioners through these services. The question is whether this trend will continue or if the quick commerce landscape will evolve. Sanjay believes that quick commerce is about the fastest possible delivery within a category, not necessarily just 10 minutes. He suggests that verticalization, where specialized platforms cater to specific needs like fashion or consumer durables, is the way forward.
Verticalization of Quick Commerce
Madav believes that certain categories need separate interfaces for speedier consumption, including fashion, pharma, gifting, and furniture. Fashion requires a different interface due to the vast number of SKUs (stock keeping units). Pharma needs a separate interface due to compliance requirements and different dark store needs. Gifting occasions are increasing, and there's a need for platforms that can cater to this. Furniture requires different infrastructure and supply chains. Madav doesn't see electronics going into verticalized quick commerce due to easy curation and no specific compliance needed.
Consumer Behavior and the Fashion Industry
The discussion shifts to consumer behavior, particularly in the fashion industry. Rohin points out that horizontal quick commerce is a zero-sum game, where purchases from one platform replace those from another. Sanjay explains that fashion is different because consumers have specific need states and brand preferences. Gen Z consumers often engage in last-minute shopping for various occasions, making quick commerce appealing. Gifting is also a significant driver. Slick Club, for example, positions itself as a last-minute fashion app.
The Economics of Quick Commerce
Sanjay and Madav discuss the economics of quick commerce, particularly the costs associated with returns and reverse logistics in the fashion industry. Madav mentions that Zippy works with fashion marketplaces, setting up dedicated dark store facilities for them. He highlights that fashion requires different dark store designs and supply chains compared to groceries or electronics.
The Future of Fashion Quick Commerce
Madav notes that there are 15 new insurgent players focusing on fashion quick commerce, with some already live and others having raised significant funding. He predicts that a problem one year down the line is fashion is very fast in nature. Styles keep changing, seasons keep changing. You can keep the same maggi packet and the same diet cook as you mentioned at five different duck stores but you can't keep the same libas korti of the same size and color in the same hyperlocal zone within 5 kilometers with five different sets of inventory being kept and that will need aggregation and enablement by a player who comes with common inventory and exposes the inventory to a bunch of these marketplaces.
Predictions and Final Thoughts
Sanjay predicts that in three years, the top 5-10% of India will start paying a reasonable price for convenience, making quick commerce businesses viable. Madav believes that verticalized quick commerce players will become profitable before horizontal players due to basket sizes and margin profiles. Rohin suggests that many vertical players might be acquired by larger horizontal companies.
