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Quick commerce in India: does an order make money?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

A quick-commerce app in India delivers groceries in about 10 minutes from small local warehouses (dark stores). The exhibit shows the economics of an average order. Is it profitable, and what would it take?

Format note: Interviewer-led: the interviewer shows the order waterfall and asks the questions in order.

2. Answers to clarifying questions

Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.

If asked: Should contribution include the dark store's running costs?
Answer: Yes, include all costs that vary with orders plus the store's own running costs; exclude head-office costs.
If asked: How many orders does a typical store handle, and what does it cost to run?
Answer: About 2,000 orders a day; about INR 60,000 a day to run.
If asked: How does the app earn money on an order?
Answer: It runs a marketplace, so it earns a take rate (commissions, fees, and ad income from sellers) of about 18 percent of order value; the average order is about INR 500.

3. The hypothesis a strong candidate states

Listen for an early, testable guess like this one. It does not need to match word for word.

Quick-commerce stores have high fixed costs, so my hypothesis is that orders lose money at today's volume and order size, and that more orders per store plus bigger baskets can fix it.

4. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Contribution per order, then the levers
- Take-rate income per order
- Variable costs: rider, packaging and payment, discounts
- Key: Dark-store cost per order (falls with volume)
- Levers: order value and orders per store

Exhibit 1

Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).

Economics of an average order today (INR, illustrative)(INR per order)

So-what

Each order loses about INR 10. The rider and the dark store take most of the margin, and the store cost falls as orders per store rise.

5. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Take-rate income
What a strong candidate does: INR 500 order value at an 18 percent take rate.
Take-rate income per order (INR): 500 × 0.18 = 90
Step 2: Dark-store cost per order
What a strong candidate does: INR 60,000 a day spread over 2,000 orders.
Store cost per order (INR): 60,000 ÷ 2,000 = 30
Step 3: Contribution per order today
What a strong candidate does: Take-rate income minus rider (INR 45), store (INR 30), packaging and payment (INR 10), and discounts (INR 15).
Contribution per order (INR): 500 × 0.18 - 45 - 60,000 ÷ 2,000 - 10 - 15 = -10
Step 4: Break-even orders per store
What a strong candidate does: Before store costs, each order contributes INR 20. The store needs this many orders a day to cover INR 60,000.
Break-even orders a day: 60,000 ÷ (500 × 0.18 - 45 - 10 - 15) = 3,000
Step 5: Store cost per order at 3,000 orders
What a strong candidate does: More orders spread the same store cost.
Store cost per order (INR): 60,000 ÷ 3,000 = 20
Step 6: Both levers together
What a strong candidate does: At 3,000 orders a day and an average order of INR 600.
Contribution per order (INR): 600 × 0.18 - 45 - 60,000 ÷ 3,000 - 10 - 15 = 18

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Each order loses about INR 10 today, so growth should focus on density and basket size, not on opening more stores. First, store costs are fixed, so at 3,000 orders a day the store breaks even at today's basket. Second, raising the average order to INR 600, through minimum order values and adding higher-value items, lifts contribution further, to about INR 18 per order at 3,000 orders. Third, discounts of INR 15 per order are larger than today's loss, so cutting them for loyal customers is the quickest lever. Pause new store openings until existing stores pass 3,000 orders a day.

Risks a strong answer names: Cutting discounts may reduce orders; Higher minimum orders may push small-basket customers to rivals; Rider costs may rise with wages.

Next steps: Track contribution per order by store weekly; Test a minimum order value in two cities; Reduce discounts for customers who order at least weekly.

Strong versus weak

A strong answer

Built contribution line by line, saw that store cost is fixed, found break-even orders per store, and sized both levers.

A weak answer

Recommended more marketing to grow orders across more stores, adding stores that each lose money.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.