Non-grocery items deliver bright growth to dark stores

Non-grocery categories including beauty, toys, health and electronics are witnessing robust sales growth on quick-commerce platforms such as Zepto, Swiggy Instamart and Blinkit as they continue to diversify their range of offerings beyond food-related products to tap a larger user base.

While the overall base for the new categories is still small, aggressive expansion by these players is starting to ensure a dominant presence for these categories on such platforms, people aware of their growth trajectory said.

Zepto has doubled sales in segments such as toys and electronics accessories on a month-on-month basis.

Fastest Growth Channel for D2C Brands

The beauty category at the Mumbai-based firm has expanded three-fold already, internal estimates showed. Around 15% of Zepto’s $1.2- billion annualised gross sales currently includes non-grocery products, said a Goldman Sachs report.

Several direct-to-consumer (D2C) brands across segments told ET how quick commerce has become the fastest growth channel for them and is increasingly being tested as a high-engagement platform for big-ticket purchases, such as Sony’s gaming console PlayStation.

Categories such as electronics, beauty, home and toys on Swiggy Instamart have seen “a robust month-on-month growth… with March touching our highest-ever sales”, said Phani Kishan, cofounder, Swiggy, and head, Instamart. The firm also “ramped up its product selection and assortment by almost 4X in the past year, particularly in categories like toys, beauty, electronics, and home & kitchen”, he said.

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Earlier this week, new-age, remote-powered fan brand Atomberg listed its products on Blinkit, saying the items are available at the same price point as on other ecommerce platforms -- with the added benefit of 20-minute deliveries.

While Instamart and Zomato’s Blinkit sell third-party poultry and meat products, Zepto runs its private label Relish, which has struck a Rs 300-crore annualised gross sale run-rate.

“These categories, new to Zepto, right now are growing 100% month-on-month at least,” said Aadit Palicha, CEO, Zepto. New stock keeping units have helped boost sales, he said.

Zepto is in talks to raise at least $300 million for its broader ecommerce play, ET reported on April 2. While Swiggy is preparing to file for an IPO this year, incumbent Flipkart is readying its entry into quick commerce. Zomato has invested $240 million in Blinkit over the last one year.

Also read | Blinkit will be bigger than Zomato in a year: Deepinder Goyal

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Beauty More Than Skin Deep

Sales in the beauty and personal care (BPC) segment are likely increasing more than 20% quarter-on-quarter, senior executives in the space told ET. Earphones & accessories, and health and nutrition brands are also likely seeing double-digit growth on a quarterly basis, executives aware of the sales trajectory said.

For personal care brand Mamaearth, quick commerce platforms account for under 5% of total sales, but the segment expanded nearly threefold between the first and the fourth quarters of last year, said Zairus Master, chief business officer.

Beauty brand Sugar Cosmetics said it had been garnering sales of more than Rs 2 crore per month on quick commerce channels. Cofounder and chief operating officer Kaushik Mukherjee told ET the firm expects sales to grow four-fold by the end of FY25.

Also read | Zepto, Blinkit adding fashion, electronics, beauty and more

“On Zepto, we reached Rs 1 lakh of sales per day -- usually considered a landmark -- in just the second month. Compare this to about four to five months it takes us to reach that level in other online sales channels,” Mukherjee said.

Pilgrim, another beauty brand, is presently clocking about 8% of its overall sales from quick commerce platforms, from barely anything at all until a year ago, cofounder Anurag Kedia told ET.

For audio wearables brand Noise, quick commerce is showing the strongest sales growth across various other platforms, said the company’s cofounder Gaurav Khatri. Aman Gupta of Boat concurred. He said sales have grown by 40% on a month-on-month basis and the firm is selling over 45,000 units a month.

Also read | Expect quick-commerce firms to battle ecommerce soon: Zepto investor Glade Brook

Stocking Up

As a new category, quick commerce is expanding the variety of stock keeping units (SKUs) from brands.

Firms are still experimenting with different types of products and some categories such as earbuds were naturally seeing much higher uptake compared with smartwatches, Noise’s Khatri said.

A similar expansion is seen in the beauty and personal care segments. Sugar’s Mukherjee said the firm only listed about 120 SKUs on quick commerce platforms at a time, compared with more than 500 SKUs it actually has.

Pricing of the same products on quick commerce platforms were roughly comparable with channels such as ecommerce and the firm’s own websites. For Mamaearth, products such as face wash and sunscreen sold on Blinkit were priced similar to those on ecommerce platforms such as Flipkart, and slightly lower than on its own website. For Noise and Boat, similar products on quick commerce and ecommerce platforms saw price differences of about Rs 100, but were discounted heavily from their sticker prices irrespective of the platform.

“Our go-to-market strategy for quick commerce roughly resembles that for ecommerce, whether in terms of discounts, marketing, visibility and so on… The only major difference is that there is a sharp difference between BAU (business as usual) strategy and festive strategy on ecommerce, while that is not the case with quick commerce,” Mamaearth’s Master added.