When discussing metros, it is important to consider the definition of a metro. There is no standardised definition. However, if we look at cities with a population of more than a million, there would be a certain number of such cities in India—perhaps 50 or 55. I am not completely certain of the exact number.
Beyond that, Blinkit is already operating in 85 cities or towns, with some locations having more than two stores. My perspective is that quick commerce platforms have the potential to expand beyond metros, provided there is sufficient population density in these areas and adequate affluence.
Affluence, in this context, refers to purchasing power. As long as these two conditions are met, the environment is favorable for quick commerce. Even in areas with relatively lower density, platforms can still perform well if there is enough affluence, as they can offer higher-value SKUs. This includes not just groceries but also electronics and other product categories, which can contribute to profitability.
I strongly believe that expansion beyond metro cities is possible. Quick commerce platforms could potentially operate in 100 to 150 cities.
However, as Blinkit has stated, 8% of their top-performing cities contribute to 80% of their total sales. A significant portion of revenue continues to come from a small number of cities.
While there may be some changes over time, it is unlikely that the overall distribution of sales will shift drastically. Even within large cities, variations exist. For instance, an analysis by HDFC Securities of Blinkit’s stores in NCR found a power law distribution. The top one-third of stores generate the majority of the volume, while many smaller localities in certain areas do not attract enough traffic and sales.
City-wide differences are not the only factor; variations exist within cities as well. Different localities will exhibit distinct consumer behavior. For example, the purchasing patterns in Indiranagar will be significantly different from those in another area.