What is Dark store (quick commerce)?

What it is

A dark store looks like a small supermarket inside but is not open to the public. Staff pick items from shelves as orders arrive in the app, pack them and hand them to delivery riders. Because each store serves only nearby areas, and carries a limited range of the fastest-selling items, deliveries can arrive within minutes.

Platforms usually feed dark stores from larger mother warehouses or regional distribution centres. Brands generally deliver to those warehouses, not to each dark store.

How brands' stock gets there

There are two broad ways a brand sells through a quick-commerce platform:

• Marketplace model. The brand, or a seller acting for it, owns the stock in the dark stores and sells to the customer, and the platform charges fees and commission.
• Purchase order (PO) model. The platform's buying entity buys the stock outright and owns it in its warehouses and dark stores. The brand's sale is to the platform.

Which model applies changes who owns the stock, who invoices the customer, and how GST and TDS work. See the quick-commerce PO model.

What it means for a brand

• Small stock per location. Each dark store holds little, so stock-outs happen store by store. Ask the platform for store-level availability, not only total sales.
• Shelf life. Platforms set minimum remaining shelf life when goods arrive. Products close to expiry are rejected or returned.
• Fast product cycles. Space is tight, so slow sellers are delisted quickly.
• Visibility costs. Placement in the app is often bought through ads or visibility fees, which belong in CM3.
• Damage and expiry. These are usually passed back to the brand by debit note, so check them against the agreement.

GST for stock held in dark stores

Where a seller owns stock kept at a location, that location generally has to be declared on the seller's GST registration, as an additional place of business, and a separate registration is needed in each state where stock is held. This is a key reason platforms and brands choose their model carefully. Check the position for your arrangement before sending stock that you will still own.