Walmart-owned e-Commerce behemoth Flipkart has appointed Kabeer Biswas, the co-founder of hyperlocal delivery platform Dunzo, to lead its quick commerce business, Minutes. Biswas is set to join Flipkart on January 13 and will closely work with Hemant Badri, Senior Vice-President, in a move that puts the company in a sweet spot to up its ante in the fast-emerging quick commerce (qcom) sector. Sources close to the development have confirmed that Biswas had communicated his intention to leave Dunzo to its investors, as the company was facing financial troubles.

Biswas co-founded Dunzo in 2015, and Flipkart's decision to appoint him is a strategic move to further its interests against competition in the fast-growing qcom market. These companies, including Zomato-owned Blinkit, Swiggy Instamart, and Zepto, are aggressively scaling up their services to deliver everything, from food and beverages to smartphones and electronics in under 10 to 15 minutes. In this scenario, Flipkart now sees an opportunity to capitalize on the increasing demand for on-demand, ultra-fast deliveries, which have become extremely popular during the pandemic and are here to stay.

According to sources, work is underway on the backburner as Biswas moves into Flipkart; there has been considerable effort behind the scenes in making sure there is no conflict of interest given Biswas' presence as a public face for Dunzo. Both Flipkart and Biswas have refused to comment publicly on the issue.

Flipkart has been aggressively scaling the quick commerce service, Minutes. It targets delivery of grocery items, home care products, and high-value things like electronics-products, like smartphone and laptop-buying and returns-in short durations. It reportedly is ramping up the same and would add 150 dark stores in the current quarter. The addition of Biswas to the leadership team is expected to accelerate this growth as the company strives to compete with more established qcom platforms.

Dunzo, for which Biswas was instrumental in its early development, has recently faced significant financial issues. Initially, it started as a task management platform using WhatsApp, then gradually evolved into a full-fledged hyperlocal delivery service for grocery, food, and other essentials on-demand delivery. But despite raising enormous funding from the most prominent investors, Dunzo could not succeed in achieving profitability in the long run.

Total funding was raised to the tune of $449 million by investors, such as Reliance Retail, Alphabet's Google, Alteria Capital, Blume Ventures, and Greyhound Capital. In 2022, Reliance Retail led a funding round of $240 million in Dunzo. With that, the company acquired 25.8% of Bengaluru-based startup, marking the company's entry into the ultra-fast commerce market.

Dunzo, however, has seen growing financial problems. The company has been struggling to meet the financial obligations it has, which includes not paying staff salaries for over 18 months. It has also led to the departure of several senior executives, such as co-founders Mukund Jha, Dalvir Suri, and Ankur Aggarwal. Dunzo also had to experience massive layoffs and issues in settling statutory and vendor dues. In August 2023, Biswas wrote to the employees, conceding that the company had not received promised funding that was meant to pay back outstanding salaries and clear vendor dues.

Financially, Dunzo's case deteriorated in FY23 as it posted Rs 1,801 crore losses compared to Rs 464 crore in FY22. Expenditure at dark stores, advertisements, and employee costs escalated for the company. Revenues have increased four times that is, to Rs 226 crores in FY23; however, Dunzo's EBITDA margin has stayed at dismal -677%. Operational costs could not be tamed by the firm even though the revenue has increased manifold times.

Dunzo has drastically reduced its operations, and creditors have taken the company to the National Company Law Tribunal (NCLT) for not settling the dues. Though the company is still running, its future remains uncertain unless it manages to raise fresh funding and stabilizes its financial situation.

Biswas' exit from Dunzo happens when quick commerce is getting considerable attention from investors and companies. Analysts believe that Amazon and Flipkart will have to invest at least $1 billion in the next two to three years to compete effectively in the quick commerce space and catch up with established players like Blinkit, Swiggy Instamart, and Zepto. These companies are already dominating the space, focusing on 15-20 minute deliveries of essential items.

The market for fast commerce is forecasted to be $40 billion by 2030, and it is growing from $6.1 billion in 2024, according to a report from Datum Intelligence. This explosive growth reflects a clear consumer demand for the convenience of instant deliveries, particularly for groceries and household goods.

As the market is changing at such a rapid pace, Flipkart is aggressively adopting a competitive strategy for its qcom platform, Minutes. It wants to deliver high-demand items such as smartphones, laptops, and even medicines within 10 to 15 minutes from selected areas of Bengaluru. The aggressive pricing strategy by Flipkart has already gained huge attention in the industry as it positions it as a strong competitor to Blinkit, Swiggy Instamart, and Zepto.

As Biswas takes up the new role, Flipkart's leadership hopes his experience with Dunzo will enable the company to scale its qcom operations more quickly and take a larger chunk of the fast-growing ultra-fast delivery market. With the backing of Walmart and a strong focus on technology and logistics, Flipkart aims to capitalize on the shift toward convenience-driven consumer behavior and continue the fight for dominance in the rapidly evolving Indian e-Commerce sector.