Inside the fast-paced business of dark stores

On CMH Road, a popular shopping haunt in Bengaluru’s Indiranagar area, changes caused by the pandemic are very apparent. Some well-known businesses have disappeared, while a few upstarts have taken up space.

The high-street retail outlets here are hoping for the rush of customers to return soon. There is a Zepto store midst them, but it is not expecting, or admitting, anyone other than light-footed delivery executives on site. One after another, the executives fan out to complete 10-minute grocery runs, the company’s big promise to its users.

Zepto’s competitors in the ultrafast delivery war, Dunzo and Swiggy Instamart, also operate from this stretch. 

Before Covid-19 struck in 2020, hyperlocal warehouses and micro-fulfilment centres, commonly known as dark stores, didn’t exist in upscale neighbourhoods like Indiranagar and south Delhi’s Saket. Today, such facilities with in-your-face branding can be found in prime localities.

Quick commerce’s current order format of 10 to 20 minutes is part of a broad trial in the industry, and its success hinges on instant customer convenience and delight, unlike in the case of next-day delivery models. 

But just as Flipkart had to create its own logistics network to kick-start Indian ecommerce’s growth story, the new crop of online grocers needs to make huge investments to set up physical infrastructure.

Context: Space on the high street costs twice more than real estate elsewhere. Moreover, the prices of bare-shell properties, preferred for dark stores, have climbed by 30%, as per industry estimates.