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[shadowfaxnews]

Nykaa, Licious amp up quick commerce game as consumers demand instant gratification

Beauty retailer Nykaa has launched a 10-minute delivery pilot in Borivali, Mumbai, as the rapid growth of quick commerce starts disrupting multiple product categories, pushing vertical players to find ways to drastically speed up deliveries.

Direct-to-consumer meat brand Licious is piloting deliveries of ready-to-eat food items in certain locations in Gurgaon in about 15 minutes though its promise remains half-an-hour delivery, while top fashion platform Myntra is piloting a 4-hour delivery plan in four cities, including New Delhi and Bengaluru.

Delivering instant gratification is clearly the need of the hour.

Nykaa’s quick commerce testing comes at a time when beauty has emerged as one of the top grossing categories on rapid delivery platforms such as Blinkit, Zepto, Swiggy Instamart and BigBasket’s BB Now.

The Mumbai-based beauty retailer is expected to add more pin codes in Mumbai for 10-minute delivery.

It plans to undertake a major update on its platform to launch the service in more locations, people aware of the matter told ET.

It is likely to have a separate brand name as well, they said.

“Certain low-priced items such as kajal pens, foundations or daily-use skincare items are finding traction on quick commerce…and platforms such as Nykaa stand to lose,” a senior quick commerce executive told ET. “Same goes for other categories such as fashion, home decor…where more vertical platforms will do quick deliveries.”

The CEO of a top quick commerce player said beauty in select stock keeping units (SKUs) are seeing one of the fastest growth rates among the new-to-quick commerce segments.

Industry executives, however, said that while horizontal quick commerce platforms such as Blinkit and Zepto are likely to retain a stronghold in grocery deliveries, there is a play in quick commerce for vertical platforms with a wide range of SKUs and deep supply-side relationships.

An email sent to Nykaa didn’t elicit any response until press time Tuesday. Licious also did not comment.

The Bengaluru-headquartered online meat shop “has been conducting one-to-two-hour deliveries in major markets and often delivering ahead of the promised time,” a person aware of the matter said. “In Gurgaon, there is a new experiment to reduce the time even further based on the density of orders,” the person added.

These developments come at a time when large horizontal e-tailers are firming up their quick commerce play. While Flipkart has launched its 10-minute delivery service Minutes in Bengaluru, Delhi-NCR and Mumbai, Amazon is working on its Q-commerce offering, ET has reported earlier.

Last week, Swiggy started the 10-minute food delivery service Bolt, and it is understood that its rival Zomato is planning to bring back a 10-minute food delivery option for certain items, too, in partnership with top cafes and quick service restaurants.

ET had reported earlier that even logistics players such as Delhivery, Shadowfax, Ecom Express and Xpressbees are entering the quick commerce space.

Also Read | Tiger Global conducts due diligence of Zepto dark stores as it eyes quick commerce

Beauty and the quick beast

Nykaa initially plans to take about 5% of its total SKUs to the quick commerce offering as it sees certain kinds of products being ordered for quick delivery, people cited above said.

Multiple industry executives told ET that several brands — depending on the category — are increasingly moving to same-day delivery in top metros, underscoring the changing nature of delivery expectations from consumers.

“This is what’s leading to the dynamic changes. You don’t want to wait for a basic kajal for two days. These products are selling fast and consumers want them instantly,” a senior quick commerce executive said.

Nykaa has been offering same-day delivery for orders placed before 12 pm and next-day deliveries are done for orders after 12 pm in four metros.

“For Nykaa, they already see about 10–15% of orders in the top four metro cities being delivered the same day while 85–90% of the orders get delivered by the next day,” a person aware of the numbers said.

A recent note from JP Morgan said Nykaa’s premium portfolio is growing the fastest. “Nykaa sees no major impact from increasing proliferation of quick commerce on account of its skew towards more beauty products (80–85% mix) and tier-II+ cities (66% contribution). Nevertheless, Nykaa aims to enhance same day/next day order delivery rate to 65% of orders in top 12 cities and 60% of the orders from top 110 cities through higher efficiency of its supply chain network and expects no major investment in the initiative,” the report said.

In August, Varun Alagh, cofounder and CEO of direct-to-consumer beauty and personal care brand Mamaearth, had said during the company’s analyst call that quick commerce was the fastest growing sub-segment within its online commerce channel. He had pointed out that quick commerce sales — most of which were coming from top 10 cities — contribute over 10% of the company’s online revenue.

Beyond instant gratification

Quick commerce along with highly competitive new brands is speeding up the premiumisation trend in the country, CLSA said in a recent note.

“We agree that quick commerce will accelerate premiumisation, but note the competitive intensity in premium categories is even higher than in standard categories, especially as new entrants are likely to target higher gross margin categories. This is especially evident in categories such as premium personal care, beauty, premium foods and premium home care, where competitive intensity from new entrants is the highest,” the brokerage said in the note dated September 24.

During the ET Startup Awards 2024 ceremony held on October 5, a panel discussion chaired by Infosys chairman Nandan Nilekani threw light on the rise of instant gratification in Indian consumption.

During the course of the discussion, Zepto cofounder and CEO Aadit Palicha said the rise of quick commerce was on account of factors beyond just instant gratification.

“When you look at why quick commerce is working in India, it’s largely because we’ve been able to cater to ‘small ticket multiple times a week’ use case that is unique to Indian commerce,” Palicha said. “If you go to the West, for example, it’s precisely the opposite — it (grocery shopping) is large baskets one or two times a month. The average frequency of transactions in India on grocery household essentials is 2.2 times a week… In the US it’s 2.4 times a month.

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[shadowfaxnews]

Festive Rush Sparks Speed War: Quick Commerce & E-commerce Battle For Fastest Deliveries

SUMMARY

Same-day and next-day deliveries have grown 4–5X during peak periods, now accounting for 12–15% of total ecommerce deliveries, which is a big leap from almost zero just 18 months ago

While fast delivery services are in high demand, they come with operational challenges. One of the biggest hurdles is optimising inventory placement

As the industry stands at the precipice of super-fast deliveries, building an efficient supply chain will be the most critical element for the long-term sustainability of India’s quick delivery realm

This festive season will be all about the need for speed, as ecommerce majors have now entered the paradigm of swift deliveries (same day or next day), pivoting from their earlier timeline of 4–5 days.

Making the game of deliveries insanely difficult to play will be quick-commerce players that are expected to capture the majority of the customer base seeking instant gratification. All in all, ecommerce platforms will be seen upping the ante in staying ahead of the delivery curve and ensuring that no shopper is left craving amid the festive rush.

However, this shift in ecommerce behavior has been in the making for some time, and the trigger has been the maturity of the Indian quick delivery ecosystem, which currently drives 40% of online grocery sales.

Over the past year, ecommerce marketplaces have made significant strides in enhancing delivery speed, introducing same-day and next-day services to cater to customer demands. A vibrant example is Flipkart, which, at the start of the year, announced that it would offer same-day delivery across multiple product categories at no additional cost.

With the market at stake, Amazon followed suit, while beauty platform Nykaa and fashion site Myntra began testing same-day delivery options. Witnessing this, many D2C brands are also adapting to remain competitive.

While they may not match online marketplaces in order volume, they’re eager to offer quicker delivery options to stay competitive. A case in point is GenZ-focused fashion startup NEWME, which recently launched 90-minute delivery for its products in select Delhi NCR areas.

“Speaking with Inc42, logistics experts said that the demand for fast delivery has surged dramatically compared to last year’s festive sales. Same-day and next-day deliveries have grown 4–5X during peak periods of festive sales, now accounting for 12–15% of total ecommerce deliveries, which is a big leap from almost zero just 18 months ago.”

This surge comes as ecommerce firms like Amazon, Flipkart, and Meesho are expected to register a 20% year-on-year rise in gross merchandise value, generating sales in the range of INR 1 Lakh Cr to 1.2 Lakh Cr this festive season, according to Redseer Strategy Consultants. Quick commerce is anticipated to contribute around 8% to this overall growth.

Festive Rush Paves The Way For 5X Surge In Same-Day Delivery

Speaking with Inc42, COO of Ecom Express, Vishwachetan Nadamani, said that during the festive season, the speed of deliveries naturally improves due to increased demand, with line-haul trucks operating more frequently. However, the surge in fast delivery requests is more pronounced this year.

Therefore, the executive added that the company has rolled out same-day delivery and next-day deliveries in India’s top 10 metro cities, with the infrastructure fully established to support these services.

Meanwhile, Shadowfax’s cofounder and chief business officer, Praharsh Chandra, said that the company is well prepared to tackle the same or next-day delivery rush.

“We started focussing on fast delivery with both brands and marketplaces about a year and a half ago. Back then, the industry had 0% same-day delivery, but now 10–14% of all intra-city orders are delivered the same day,” Chandra said.”

Chandra noted that this trend is gaining momentum as we are nearing the peak sales season. “In fact, our same-day delivery channel saw five times growth in just one day, on the second day of the sales. We experienced some very high peaks,” he said.

Chandra sees a clear shift in consumer behaviour here, with more and more customers now wanting instant gratification. “Even for nearby zones, like orders from Bangalore to Mysore, which used to take two days, people now expect next-day deliveries,” he said.

The sentiment is being echoed across the industry. For instance, Zippee’s founder & CEO, Madhav Kasturia, sees registering 6–8X growth as all its partner brands continue to scale during the festive season.

Fast Delivery Fever Grips All Categories

Fast delivery demand has risen across categories this festive season. Electronics, beauty and personal care, fashion, and home goods have seen strong interest, with mobile phones being the most popular choice. Interestingly, on the first day of sales, Shadowfax delivered 15,000 iPhones.

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“There’s demand in various categories. However, it’s crucial to focus on where the concentration of that demand is and whether brands have optimised their supply chains with warehouses in these top metros,” the Ecom Express COO said.”

So far, demand for fast delivery is highest in metro cities like Bangalore, Mumbai, and Delhi. However, this trend is not limited to urban areas. Brands are now stocking inventory in Tier II and Tier III cities like Patna, Jaipur, and Guwahati to offer faster delivery options in these regions as well.

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This requires maintaining fewer pin codes per dark store, which complicates logistics, Zippee’s Kasturia said, adding that the logistics startup was addressing it by establishing localised inventory hubs, enabling quicker access and more streamlined delivery routes.

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[shadowfaxnews]

Shadowfax Rolls Out AI-Backed Address Intelligence System For Seamless Deliveries

SUMMARY

Shadowfax launches SF Maps, an AI-powered address intelligence system for accurate deliveries.

2. The new system predicts customer locations with over 90% accuracy within 100 meters, reducing cancellations by 10%.

3. SF Maps uses artificial neural networks and real-time data integration to navigate India’s complex addressing system.

Shadowfax, India’s leading provider of cutting-edge e-commerce logistics solutions, proudly introduces SF Maps, an advanced AI-based address intelligence system designed to enhance delivery accuracy and efficiency. This innovative tool predicts customer locations with unparalleled precision, setting a new industry standard with over 90% accuracy within 100 meters of the intended destination. SF Maps greatly improves navigation for delivery partners, thereby assisting e-commerce platforms and Direct-to-Consumer (D2C) brands in reducing cancellations due to address inaccuracies on their platforms.

In contrast to standardized address formats prevalent in Western countries, Indian addresses often lack structure, are susceptible to language and understanding-based gaps, and are highly prone to input error posing challenges in pinpointing exact locations during delivery. SF Maps addresses these complexities by leveraging a sophisticated AI/ML model trained on a vast dataset of Shadowfax’s past deliveries and pickups exceeding 1.5 billion data points. This model adeptly handles incomplete addresses, ambiguous area names, reliance on distant landmarks, and inaccurate pincodes, ensuring smoother operations. Further, precise navigation to customer addresses enables seamless deliveries without the need for additional calls, effectively reducing instances of missed deliveries and improving overall efficiency. Since the introduction of SF Maps, Shadowfax has achieved a significant reduction in customer cancellations or RTOs (Return to Origin) by almost 10% and boosted customer Net Promoter Score (NPS) by 25%.

Vaibhav Khandelwal, Chief Technology Officer at Shadowfax, “SF Maps represents a significant leap forward in our mission to optimize the delivery speed and elevate customer experience while solving fundamental problems in last-mile logistics. This innovative AI model trained on our vast set of historical delivery data drives significant operational efficiencies for us. We deeply understand the problems that arise due to incomplete addresses and how it hinders further innovation and hence we aim to make this AI model generally available for research in the future.”

Under the hood, SF Maps uses an in-house Artificial Neural Network (ANN)-based embedding model, trained using a Siamese Network architecture. The generated embeddings are fed into VectorDB and the extracted locations are passed through H3 geospatial indexing, further fine-tuning location intelligence. This custom-built model captures complex contextual relationships between address components and their geographical associations, leveraging deep learning algorithms to discern intricate patterns for more accurate location-based intelligence. The underlying algorithms and design architecture allow SF Maps to be a self-correcting engine that captures changing ground operations realities. The feedback loop is powered by real-time delivery partner geolocations that Shadowfax captures every 5 seconds while they are on their platform. Shadowfax also deploys a WhatsApp-based conversational bot that interacts with customers and gathers address information for improved results and error correction.

For more information, visit https://www.shadowfax.in/