Evolution and Impact of Quick Commerce in India

  • 0
  • 3039
Font size: 18px14px
Print

Evolution and Impact of Quick Commerce in India

Context:

Quick commerce (Q-commerce) first gained prominence during the COVID-19 pandemic, offering under-lockdown consumers a way to receive essential goods swiftly. However, beyond its initial utility, Q-commerce has continued to shape shopping behaviours, particularly in urban India, by redefining convenience and speed in digital retail.

How Quick Commerce Works?

  • Q-commerce, a subset of e-commerce, focuses on delivering products to consumers’ doorsteps within 10 to 20 minutes. 
  • This is made possible through a network of dark stores and distribution centres
  • Unlike traditional retail stores or supermarkets, dark stores are dedicated warehouses designed exclusively for fulfilling online orders, ensuring proximity to customers for rapid delivery.
  • A key advantage of Q-commerce over traditional retail is its reliance on mobile apps, which leverage customer data to enhance shopping experiences. 
  • Platforms use data analytics to manage inventory efficiently, predicting demand trends based on seasonality, demographic shifts, and purchasing behaviour. 
    • For instance, they can anticipate when to stock up on specific products based on changing consumer preferences.

Benefits for Brands

  • According to a study by the Centre for Transportation and Logistics at IIM Ahmedabad, Q-commerce benefits retailers by increasing brand visibility due to its widespread reach. 
  • India’s availability of low-cost, employable manpower has been crucial to the sector’s growth. 
  • Another key advantage for brands is the economies of scale that Q-commerce platforms provide. 
    • For example, individual companies distributing frozen products might need to invest in costly freezers for Kirana stores, whereas Q-commerce platforms streamline such requirements through centralised distribution.

Changing Consumer Preferences

  • A survey by NeilsenIQ reveals that 41% of urban consumers prefer modern trade, while 25% opt for general trade, 22% for e-commerce, and 12% for Q-commerce. 
  • Meanwhile, Deloitte reports that major FMCG brands have witnessed a two-fold increase in Q-commerce’s share within their total e-commerce sales, now comprising around 35% of their online revenue.
  • Deloitte’s 2024 consumer survey indicates that quick commerce is favoured over traditional e-commerce for purchasing food and beverages due to impulse buying and immediate needs. 
  • In contrast, traditional e-commerce remains the preferred choice for home, beauty, and personal care products, which tend to be planned purchases. 
  • Modern trade continues to dominate across product categories, primarily due to the availability of larger pack sizes, better prices, and attractive discounts.
  • One major consideration in Q-commerce is the minimum cart value required for free delivery. 

Market Growth and Competition

  • The Indian Q-commerce market is currently valued at $3.34 billion and is projected to grow to $9.95 billion by 2029, according to Grant Thornton Bharat. 
  • The sector recorded a 76% year-on-year growth in FY 2024. 
  • A report by financial services firm Motilal Oswal states that as of Q1 FY 2025, Zomato-owned Blinkit leads the market with a 46% share, followed by Zepto at 29% and Swiggy Instamart at 25%.

Challenges for Traditional Retailers

  • Despite its rapid growth, Q-commerce has faced backlash from traditional retailers and FMCG distributors. 
    • Organisations such as the All-India Consumer Products Distribution Federation (AICPDF) have lodged complaints with the Competition Commission of India (CCI), accusing Blinkit, Zepto, and Swiggy Instamart of engaging in anti-competitive practices.
  • The primary concerns include predatory pricing and deep discounting. 
    • Distributors allege that Q-commerce platforms set product prices below landing costs to drive traditional retailers out of business, only to increase prices later to recover losses. 
    • The AICPDF also points out that these platforms benefit from venture capital and foreign direct investment, giving them an unfair advantage. 
    • Additionally, platforms are accused of leveraging app data to implement differential pricing based on factors such as a customer’s location, device type, and purchase history.
Share:
Print
Apply What You've Learned.
Previous Post Water-Ice Beyond Lunar Poles
Next Post India-U.S. Bilateral Trade Agreement: WTO Compliance and Strategic Considerations
0 0 votes
Article Rating
Subscribe
Notify of
guest


0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x