Shadowfax Makes Quick Commerce Its ‘Prime’ Focus

India’s logistics market is quietly fragmenting. Ever since the ecommerce boom of 2015-2016, scale in delivery was built around one idea: move as many parcels as possible for large marketplaces, as cheaply as possible. Volume was king. Margins were secondary. Most players optimised for throughput, not experience.

That model is now showing its limits, and as a result, logistics players are breaking away from marketplaces and large retail manufacturers.

Take Shadowfax, for instance. After years of operating as a marketplace-first logistics partner, the publicly listed company is now on the cusp of a strategic reset. The company believes the next leg of growth will not come from bulk ecommerce alone, it will come from same-day delivery, D2C brands, and hyperlocal commerce.

In its recent earnings call, management said: “Shadowfax Prime is now our fastest-growing vertical. Two years ago our D2C share was negligible. Today, we’re already in the early teens in terms of the growth percentage and still accelerating.”

Shadowfax wants to move downstream: closer to brands, closer to sellers, and closer to consumers. It wants to become India’s D2C-first logistics platform.

That’s because D2C volumes are expanding at triple-digit year-on-year rates, with market share moving from negligible levels two years ago to early teens today. B2C, D2C, and SME customers deliver 20–25% higher yields than enterprise marketplace clients. As this mix increases, revenue realisation rises and margins follow. In a sector known for razor-thin profitability, that distinction matters.

“In a market like ours, you grow on the back of anchor customers. Once serviceability and service quality stabilise, you start moving towards smaller sellers and brands. It’s an evolution every logistics company goes through,” the company said.

The Shadowfax Prime Playbook

Shadowfax’s D2C strategy rests on three layers. Shadowfax Prime is the core engine. The company is constantly onboarding new D2C customers and gaining market share. Prime Delivery Services, management says, is now the fastest-growing vertical across the organisation.

Alongside mass-market D2C, Shadowfax is also moving up the value chain. Its acquisition of CriticalLog brings more than 500 small D2C brands onto the platform, enabling deliveries of jewellery, luxury apparel, and electronics.

This is a segment traditional logistics companies have largely avoided. High-value, time-sensitive shipments require specialised handling, tighter operational controls, and greater accountability. Yet this is precisely where demand is growing, particularly among premium D2C brands seeking faster delivery experiences for their customers.

Indeed, same-day and next-day delivery are no longer premium features. They are increasingly table stakes. Shadowfax believes it is well positioned for this shift, having spent years building nationwide serviceability through anchor customers before moving downstream toward smaller sellers.

Today, Shadowfax operates across more than 15,000 postal codes, with ongoing investments in last-mile infrastructure and serviceability. The company is expanding sales teams in over 100 cities while building onboarding flows aimed at making nationwide shipping accessible to even the smallest sellers. The ambition is simple: allow any brand, regardless of size, to access fast, reliable delivery across India.

Management has highlighted the rapid emergence of vertical quick commerce across multiple categories has necessitated these investments in network expansion and new hiring. From baby products and apparel to gourmet food and specialty retail, Shadowfax is seeing demand from brands looking to replicate offline retail experiences online, with speed becoming a defining differentiator.

There’s a view that India’s ecommerce growth is becoming bifurcated. At one end is value-driven commerce, serving mass consumers. At the other is luxury-driven ecommerce, catering to affluent buyers seeking premium experiences. For instance, the acquisition of CriticalLog gives Shadowfax a foothold at the top of this pyramid, allowing it to serve both extremes of the market.

Beyond small parcels and premium shipments, Shadowfax is also expanding into volumetric deliveries. The company has already built a roughly ₹50 Cr annualised business covering large parcels and appliances, despite currently servicing only about 20% of its PIN codes for volumetric shipments. White goods are slated for launch in FY27.

These categories bring higher ticket sizes, stronger realisations, and deeper integration with existing customers. Much of this growth is expected to come from Shadowfax’s current client base, as large platforms and brands look to consolidate vendors across more service lines. Volumetric logistics is still early in its lifecycle at Shadowfax, but management sees it as a significant long-term growth driver.

Shadowfax Goes Same-Day FIrst

Two years ago, Shadowfax’s D2C market share was barely visible. Last year, it was in single digits. Today, it has climbed into the early teens, as the company claims. This is part of the Prime business, which enables same-day and next-day fulfilment and is today the fastest-growing vertical for the company.

The growth is coming from two directions. First, from new customer acquisition. Shadowfax is expanding sales teams across more than 100 cities, targeting not just established brands but even micro sellers including Instagram merchants. The company is also launching self-serve tools designed to allow any seller to begin shipping nationwide within roughly 30 minutes of onboarding.

Second, from a broader shift in how Indian commerce itself is evolving. The offline economy is being rebuilt online, category by category. What started with groceries has now expanded into baby wear, apparel, gourmet food, specialty retail, and niche consumer brands. Shadowfax is already servicing many of these emerging vertical quick commerce categories.

The company sees this not as a passing trend, but as a fundamental reorganisation of retail.

At the same time, D2C brings better unit economics. While D2C and SME shipments still represent a relatively small percentage of Shadowfax’s overall revenues, they generate meaningfully higher yields than traditional enterprise contracts. As the company gains market share in these segments, management expects realisations to rise and margins to expand in tandem.

The IPO also helped remove a key structural bottleneck. A competing investor’s partial exit cleared the way for Shadowfax to onboard a large marketplace client that had previously remained out of reach. Integrations are now complete, and quick commerce volumes have already begun scaling, with meaningful revenue contribution expected in subsequent quarters.

Technology Is The Real Moat

Shadowfax is not competing through fleet ownership. It is competing on density and intelligence. Rather than buying trucks, the company has focused on building a technology layer that orchestrates gig workers at scale. AI-driven routing and clustering algorithms optimise rider earnings per day rather than per order, improving partner economics while lowering per-shipment costs as density increases.

This approach creates a virtuous cycle. Higher density leads to better routing. Better routing improves rider productivity. Higher productivity reduces per-order costs. Lower costs enable competitive pricing and faster delivery, which in turn attracts more customers.

The result is operating leverage without asset heaviness. Partner expenses, the largest cost line item, have already begun declining as a percentage of revenue. Management expects further efficiency gains as network utilisation improves and geographic density increases. This technology-led gig management model is central to Shadowfax’s ability to scale same-day delivery sustainably.

Bigger Picture For Quick Commerce

The IPO provided Shadowfax with both capital and flexibility. Proceeds helped onboard the large marketplace client while enabling continued investments in PIN code expansion, sort centres, and last-mile infrastructure. Management has been clear that it prefers asset-light growth, focusing on facilities and technology rather than vehicle ownership.

Over the next few years, Shadowfax expects revenue to grow at 25–30% annually, driven by D2C, volumetric shipments, and hyperlocal quick commerce. Long-term EBITDA margins are guided toward the early teens, with gradual expansion as higher-yield segments scale.

While the company continues to invest aggressively in capacity and serviceability, it believes the heavy lifting on infrastructure is largely behind it. The next phase is about extracting operating leverage from the network it has already built.

Shadowfax is no longer positioning itself merely as a marketplace logistics vendor. It wants to become the default delivery infrastructure for India’s instant economy: serving micro sellers, D2C brands, luxury merchants, and large-format shipments under one platform.

The company’s journey reflects a broader transition underway across India’s startup ecosystem: from scale-at-all-costs to precision-led growth, from volume-driven contracts to margin-accretive services, and from platform dependence to diversified revenue streams.

From Instagram entrepreneurs shipping their first orders to premium jewellery brands promising same-day fulfilment, Shadowfax is building for a future where speed defines customer experience.

Much like quick commerce reshaped grocery, Shadowfax is betting that speed-led logistics will redefine Indian retail over the coming decade.

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[Edited by Nikhil Subramaniam]

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