India’s dark stores boom beyond metros

New Delhi: About a third of quick-commerce dark stores in India are currently located in tier-2 cities and smaller towns, reflecting retailers' shift for the new-age channel beyond the metros.The total tally of dark stores is expected to grow nearly threefold to 7,500 by 2030 from about 2,525 as of October, according to data from property consultancy Savills India, shared with ET. "Tier-1 and 2 cities will lead this expansion, while tier-3 cities will emerge as high-potential markets, with secondary and suburban micro markets playing a key role in balancing cost and accessibility," Savills said in a report.The surge in dark stores is part of a broader trend in India's quick-commerce market, which has grown at an unprecedented pace in recent years. In terms of total area, the market is expected to expand nearly three times to 38 million sq ft from 13 million, as businesses seek to cater to booming demand for ultra-fast delivery.India's dominance in this sector is underscored by growth across the entire Asia-Pacific region, which remains the largest and fastest-growing market for quick-commerce globally. Countries like China and India are leading the quick commerce wave due to their huge consumer bases, advanced delivery networks, and increasing smartphone penetration.Eternal alone added around 1,200 dark stores last year. "More than 70-75% of our store additions continue to be in the top 10 cities. While the number of cities is expanding, the number of stores in long-tail cities remains relatively small. So, the business's success is still tied to how well we perform in the top 8 to 10 cities," said Akshant Goyal, chief financial officer of Eternal, the parent of Blinkit, during a recent investor call.126109383Demand for opening dark stores is continuing to outstrip supply, with a notable 50% gap between required and operational spaces, said Savills, adding it offers a major opportunity to property developers and investors looking to capitalise on this fast-growing sector.Earlier this year, Unilever global CEO Fernando Fernandez said he expects quick commerce to contribute 10-15% sales in India in the next three-four years, from 2-3% currently. "India is a very special place because richer Indians and poorer Indians live in close proximity that basically provide demand and supply of labour, making quick commerce a logical channel to grow," he said, adding the mix in the channel is better and favourable for margin improvement.Dinesh Taluja, chief financial officer, Reliance Retail, said during the company's September earnings call that dark stores are typically focused on larger cities where traffic congestion and delivery time constraints limit store distribution. However, Reliance also operates more than 3,000 grocery stores, filling in gaps in the network where dark stores are not yet viable, he said."In bigger cities, you cannot go beyond one to two kilometres for delivery because of traffic. So, dark stores are focused on filling those network gaps, particularly in dense locations where delivery expectations are high," said Taluja. The National Capital Region (NCR) that includes Delhi, Gurugram, Ghaziabad, Noida, and Faridabad has the largest concentration with 400 dark stores. Other cities include Bengaluru with 360 stores, Mumbai with 250 stores, and Chennai with 190.Bengaluru, which has high e-commerce penetration, leads with 150 sq ft of dark store space per 1,000 people.