The company expects to more than double its active dark store area to four million square feet (sq ft) by March 2025
As the competition in the quick commerce segment is intensifying with major players like Blinkit and Zepto looking to dominate the market, Swiggy Instamart, another key player in the segment is doubling down on strategic investments to capitalise on evolving consumer shopping patterns. It is planning to double its store count to 1,046 by March 2025 (vs 523 in March 2024) as well as increase the average size of its store by 30 to 35 per cent.
Highlighting the expansion of its dark store network, the Co-founder, Managing Director (MD) and Group Chief Executive Officer (CEO) of Swiggy, Sriharsha Majety stated, “Over the past year, we have pivoted our network to larger and more optimised darkstores which now house nearly three times the stock keeping units (SKUs). We are increasing our store counts as well and added 52 stores in Q2, taking our dark store footprint to around two million square feet (sq ft) (up 54 per cent year-on-year).
The Group CEO, in the shareholders’ letter dated 3 December 2024, added that this has resulted in its national average delivery times reducing to 13 minutes in September 2024 from 17 minutes a year ago.
Highlighting that the Instamart business is witnessing a heightened degree of competitive action, the CEO emphasised the need for agility and ‘modulating its investments towards the long-term health of the business for sustainable GOV (gross order value) growth.’
“We are replacing some of our older, small-format stores (2,500-2,800 sq ft) with larger stores (3,500-4,500 sq ft) that can house up to 20K SKUs. Additionally, we are rolling out ‘megapods’ (8,000-10,000 sq ft) in top cities, which can house over 50K SKUs. These megapods will serve consumers in 10 to 30 minutes with an extended selection of items beyond the top 20K SKUs,” as per the company’s September quarter earnings presentation.
Stating that it plans to double its store count to 1,046 by March 2025, the company’s statement added that it expects to more than double its active dark store area to four million sq ft by March 2025 (versus 1.5 million sq ft in March 2024), through a combination of new store additions and larger sized stores.
As the expanded dark store area with a larger selection will lead to a higher share of user spends and expansion of average order value (AOV), the company expects to register double-digit growth in AOV annually for the foreseeable future. Its AOV has grown by 7.3 per cent in the first half of the current financial year.
