The country’s top quick commerce (QC) players are making steady inroads into smaller towns and cities in their quest for growth. In the last one year alone, market leader Blinkit has taken its presence to a total of 200 cities from 150 cities earlier, a growth of 33%, driven in part by consumer aspirations, disposable incomes and digital adoption. Rival Instamart is now present in 140 towns; Zepto and BigBasket are in 70 and 40 cities each.
Newer players, meanwhile, are expanding even faster. JioMart from Reliance Retail is deploying a hybrid model combining over 800 dark stores with roughly 1,200 existing retail stores in 1,000 cities as fulfillment points. Flipkart’s Minutes is aiming to reach 80 cities by April from 30 cities. While most players say Tier-2 and Tier-3 markets are the next big frontier for QC, the unit economics remain unfavourable for now.
Volume Gap
Consider this: The top 8 metros in India account for around 80% of gross merchandise value (GMV), according to industry estimates. The average order value (AOV) in metro markets hovers at around `400-600 for most players, and is lower by at least 25-30% in smaller towns, experts said.
More importantly, orders per day (OPD) per dark store drop sharply below 1,000 beyond the top 10-15 cities, and fall below 700 in the next 20 cities, estimates suggest. And contribution margins — which measure per-order profitability by deducting variable costs from sales — barely exist in smaller cities as volumes and average order values remain low.
As Amarjeet Singh Makhija, partner and leader, startups and unicorns, PwC India, says, “Quick commerce is a volume game. The higher the volumes, the better it is for business.” He points out that while fixed costs are low in smaller towns and cities, average order values and volumes are not high. “This impedes growth and hurts contribution margins,” he says.
While most q-comm players continue to bleed, the exception is Blinkit which turned profitable at the Ebitda level in Q3FY26, with contribution margins improving to levels of 5.5% versus 3% and 3.7% seen in Q1 and Q2 of FY26. Analysts say the improvement in contribution margins was led by Blinkit pushing higher volumes in metro markets during the festive quarter. Markets such as Delhi-NCR, for instance, continue to grow at around 55% year-on-year for Blinkit, with the trend expected to stay, despite a push into smaller towns.
Satish Meena, analyst at Datum Intelligence, observes that business is skewed towards the top 8 metros. “Even within the top 8, some players have better penetration in certain markets. So, for the immediate term, most players will have to focus on protecting this metro market share than meaningfully expanding the number of non-metro cities,” Meena said.
While on paper, Tier-2 cities offer a more forgiving cost structure — dark store rents are lower and customers are less demanding — the operating cost differential isn’t as wide as it once was. For instance, for delivery partners, the payout gap has narrowed over the past year. For dark store staff, the wage gap is sharper. Pickers & packers in metros earn Rs 16,000-20,000 per month with night-shift premiums. In Tier-2 cities, wages run 20-25% lower, with fewer surge opportunities.
“In Tier-1 cities, companies have faced immense pressure to reach profitability. This has led to the rationalisation of payouts, essentially capping peak incentives and increasing the number of deliveries required to hit milestone bonuses,” Balasubramanian Anantha Narayanan, senior vice-president at TeamLease, said.
However, to seed Tier-2 markets like Coimbatore, Jaipur, Kochi, Lucknow, or Indore, platforms have had to keep base rates attractive to lure riders from traditional courier or food delivery jobs.
Labor Dynamics
For dark store staff, the wage gap is sharper. Pickers and packers in metros earn Rs 16,000-20,000 per month with night-shift premiums for 24×7 operations. In Tier-2 cities, wages run 20-25% lower at Rs 12,000-16,000 per month, with fewer surge opportunities.
While Tier-2 cities offer a clearer edge is retention, metros face chronic churn, around 30% monthly attrition, with workers switching for as little as Rs 500 more. “In Tier-2, the job-hopping culture is less prevalent. A tech-enabled dark store job, for instance, is viewed as a premium retail role compared to local kiranas, and attrition is 35-40% lower,” Narayanan said.
The trade-off, however, is that initial hiring is harder, requiring 4-7 days of upfront training given the lack of workers familiar with QR scanners and SKU management, Narayanan said.