The Cost Of Quick Commerce

In partnership with

Good morning. In today’s edition — how quick commerce is making supply chain logistics more expensive with Transport Corporation of India's Vineet Agarwal; mid-cap and small-cap shares tumble; food inflation continues to remain high.

CORE CONVERSATIONS

Transport Corporation of India's Vineet Agarwal On How Supply Chain Is Evolving

Last month Hindustan Unilever, one of India’s largest fast moving consumer goods (FMCG) companies, announced that it would directly supply to kirana stores, something that could disrupt traditional supply chains in the country significantly. This comes at a time when quick commerce is growing rapidly, also bringing further disruptions to logistics as we’ve known it so far.

Vineet Agarwal, managing director of Transport Corporation of India (TCI) said, “The evolution and the growth of e-commerce has really changed a lot of the supply chains. Networks had to change, the warehousing structure or the distribution networks, because there was elimination of the certain middlemen that happened,” says Agarwal.

From managing cold and dry stock-keeping units (SKUs) to adapting to smaller, more frequent order quantities, players in the supply chain sector are having to constantly adapt to the demands of a fast-paced market. Quick commerce is also driving up costs of logistics. 

“Well, costs typically are much higher because you're picking at a unit level versus at a case level or at a pallet level. And over time, whether this cost will come down, I don't think so because there could be some level of automation that will happen, conveyor belts or robotics, etc. But that will drive down costs to a certain level,” he added.

PODCAST

On Episode 480 of The Core Report, financial journalist Govindraj Ethiraj talks to Viktor Katona, head of oil analysis at energy research firm Kpler as well as Rama Bijapurkar, author, business advisor and researcher of Indian consumer markets.

• Markets hit a 7-month low, some fund managers still wary of valuations.

• Shipments of Russian oil to India assured for now as India braces for impact.

• Why oil prices are falling and India’s bargaining stance.

• Rupee slides past 86 to the US Dollar for the first time.

• How to interpret consumption trends in India when data is weak.

CORE NUMBER

$109 billion

💰This is the total value of mergers and acquisitions (M&A) recorded in India for CY2024, a 38% increase from $79 billion in 2023, The Economic Times reported on Monday. Indian conglomerates nearly doubled their deal contributions to $48 billion. Equity fundraising also hit a record $74 billion in CY2024, with a significant share flowing into startups, but many of them have faced closures, returned capital, or struggled to scale.

The IPO pipeline, valued at $35 billion, reflects optimism as several large companies, SMEs, and startups aim for public listings in the near future. However, against the backdrop of slowing GDP growth, these headline numbers raise questions about the sustainability and broader economic impact of such concentrated capital activities.

FROM THE PERIPHERY

—📊 Provisional government data released on Monday showed that retail inflation in India had lowered to a four-month low of 5.22% in December. Retail inflation was at 5.48% in January. This is, however, the fifth consecutive month where inflation has remained over 5%. Food inflation continued to remain high and rose to 8.39% annually in December. This was lower than in November when it was at 9.04%. The press release from the ministry of statistics said, “During the month of December 2024, significant decline in inflation is observed in Vegetables, Pulses & Products, Sugar and Confectionary, Personal care & effects, and Cereals and Products etc.” 

—✈️ IndiGo has opened vacancies for airport manager and chief security officer roles at Heathrow, Paris and Amsterdam airports, for internal candidates indicating it will soon expand its India-Europe network, The Economic Times reported. The low-cost airline that limited itself to narrow-body aircraft for international short haul will be leasing six Boeing 787s from Norwegian carrier Norse Atlantic to fast-track its expansion. With Airbus A350 deliveries delayed until 2027, the airline is accelerating its long-haul plans. Two 787s will join its fleet in February, with four more arriving by September. This move follows the government’s policy change allowing wet leases for new routes and addressing aircraft shortages. 

—🌐 India's trade is estimated to expand at an annual rate of 6.3%, surpassing the projected global trade growth of 2.8%, according to a Boston Consulting Group (BCG) report. In absolute numbers, India’s trade is projected to touch $1.8 trillion annually by 2033. This anticipated growth is attributed to expanding domestic markets, competitive labour costs, and supply chain diversification as companies seek alternatives to China. Geographically, this growth is broad-based: trade with the US is set to more than double to $116 billion by 2033. Trade with the EU, ASEAN, and Africa is also expected to grow by 80% over the next decade, the report added. 

—🏠 Private equity investment in Indian real estate rose 6% to $2.82 billion during April-December 2024, driven by a surge in the industrial and logistics sector. According to Anarock, property consultants, despite a drop in deal count from 30 to 24, foreign funds accounted for 82% of the total investments. The logistics sector dominated, grabbing 62% of investments, thanks largely to the $1.54 billion Reliance-ADIA/KKR warehousing deal and a $204 million Blackstone-LOGOS equity deal. Housing, offices and mixed-use projects claimed 15%, 14% and 9% of the pie, respectively..

MESSAGE FROM OUR PARTNER

10x Your Outbound With Our AI BDR

Imagine your calendar filling with qualified sales meetings, on autopilot. That's Ava's job. She's an AI BDR who automates your entire outbound demand generation.

Ava operates within the Artisan platform, which consolidates every tool you need for outbound:

• 300M+ High-Quality B2B Prospects

• Automated Lead Enrichment With 10+ Data Sources Included

• Full Email Deliverability Management

• Personalization Waterfall using LinkedIn, Twitter, Web Scraping & More

Book a demo and supercharge your sales team.

✉️ Write to us here, for queries or feedback

📩 Was this email forwarded to you? Subscribe

💰 Want to sponsor this newsletter? Contact us

💰💰 Found The Core interesting? Consider supporting us