Quick Commerce in India: A Revolution in Retail

  •   Thu, Nov 28 2024
  •   By CA K Ranganatha Achar

November 28, 2024

I live in the Northern most part of Bengaluru known as Vidyaranyapura and even I use the services of quick commerce services because I don’t like to spend a lot of time at the Billing counters of a reputed mart which really makes your shopping experience a bit tedious and tiring coupled with suspicious looks by the staff thinking that all the customers who come for shopping are potential thieves, the benefits of shopping through Quick commerce stores are you get the items delivered in my case in just 8 minutes flat without any Head ache and being a CA I just think about the whole process of execution from Start till Final delivery of the goods and I have reached a valid conclusion that a Quick commerce service depends solidly on Robust IT Infrastructure, Inventory and Control over dynamic pricing , it calls for appointment of Hands on CEO & CTO. 

Introduction:

Q-commerce (Quick commerce) sometimes used interchangeably with on-demand delivery and E-grocery is E-commerce in a new, faster form. It combines the merits of traditional E-commerce with innovations in last-mile delivery.

The premise is largely the same, with speed of delivery being the main differentiator. Delivery is not in days but minutes – 30 Minutes or less, to be competitive.

This has in turn expanded the breadth of what individuals can order, with perishable goods like groceries being a large niche q-commerce companies speak to, It tends to focus on the micro - smaller quantities of fewer goods. For example, a missing ingredient urgently needed for a recipe that’s already in motion like missing a Rasam or Sambar Powder.

Consumers now want and expect more items than ever to be delivered to their doorstep It is no longer a case of waiting 24-48 hours for a delivery. Rather, the expectation for this is now a matter of minutes. The bigger, less visible, difference happens on the backend in the way that Q-commerce operate behind the scenes. 

Quick commerce in India is a rapidly growing sector that is revolutionizing the way we shop.

It refers to the delivery of groceries and other essential items within minutes. This convenience-driven model has gained significant popularity, especially among urban consumers with busy lifestyles. Quick commerce, the concept of delivering groceries and other essential items within minutes, has taken the Indian retail landscape by storm. This burgeoning industry, spearheaded by players like Zepto, Blinkit, Swiggy Instamart, and others, is redefining consumer expectations and challenging traditional retail models. 

The Rise of Quick Commerce

  • Consumer Demand: The increasing urban population, coupled with busy lifestyles and the convenience-seeking behaviour of consumers, has created a strong demand for rapid delivery services.
  • Technological Advancements: The advent of advanced technologies like AI, machine learning, and robust logistics networks has enabled quick commerce players to fulfil orders efficiently and rapidly.
  • Investment Surge: The potential of the Indian quick commerce market has attracted significant investments from both domestic and international investors, fuelling the growth of these businesses. 

Key Players and Their Strategies

  • Zepto: Known for its ultra-fast delivery times, Zepto focuses on a curated selection of products and operates in select cities.
  • Blinkit: Formerly Grofers, Blinkit has rebranded to emphasize its quick delivery focus. It offers a wide range of products and operates in multiple cities across India.
  • Swiggy Instamart: Leveraging Swiggy's existing delivery network, Instamart offers quick delivery of groceries and other essentials.
  • Zomato Market: Zomato has expanded its services to include quick commerce, offering grocery delivery alongside its food delivery business. 

Challenges and Opportunities

While quick commerce presents immense opportunities, it also faces several challenges:

  • Unit Economics: The high costs associated with rapid delivery, including infrastructure, logistics, and manpower, make it difficult for companies to achieve profitability.
  • Competition: The intense competition among players can lead to price wars and margin erosion.
  • Sustainability: Ensuring the long-term sustainability of quick commerce models requires careful planning and cost optimization. 

Despite these challenges, the future of quick commerce in India appears promising. As consumer demand continues to grow and technology evolves, this sector is poised to revolutionize the way we shop and consume goods. The future of quick commerce in India looks promising, driven by technological advancements, evolving consumer preferences, and increasing urbanisation. As more consumers embrace the convenience of quick commerce, companies are expected to invest heavily in infrastructure, technology, and logistics to meet rising demand. 

Key trends shaping the future of quick commerce include:

  • Expansion of Service Areas: Quick commerce companies will continue to expand their reach beyond major urban centres to Tier-2 and Tier-3 cities, tapping into new markets and customer bases.
  • Enhanced Technology Integration: Advanced technologies such as AI, machine learning, and IoT will be crucial in optimising supply chains, predicting demand, and improving delivery efficiency.
  • Sustainability Initiatives: Companies will increasingly focus on sustainable practices, such as using electric vehicles for deliveries and optimising routes to reduce carbon footprints.
  • Diversification of Product Offerings: Quick commerce platforms will expand their product categories to include a wider range of items, from electronics to fashion, catering to diverse consumer needs.
  • Strategic Partnerships: Collaborations with local businesses, suppliers, and technology providers will be key to enhancing service capabilities and scaling operations. 

How does Quick Service Commerce work? 

By the time you are placing the order on an Mobile app, the server will ensure that Inventory is available at the concerned fulfilment store which in my case is (Yelahanka) or the assigned Dark store which will be in the vicinity of the place you have ordered which you would have entered at the time of registration, all this flow of order and information happens almost online and once you make the payment it’s time for the Ground staff to remove those items from the inventory and hand it over to the Gig staff who will be just waiting to take the delivery dark store and deliver the same to the customers so that is the reason why you don’t get much discounts in the pricing of good in quick service commerce entities. I have personally seen Quick commerce staff picking up Goods from Big Stores Backend with some Pre determined arrangements.

Some technical Requirements in quick Service commerce centres are as follows. 

Advanced Fulfilment Solutions: Access a robust network of micro-fulfilment centres for faster deliveries.
Real-Time Inventory Management: Tools to track inventory levels and manage stock efficiently across multiple locations.
Data-Driven Insights: Analytics to optimise delivery routes and improve operational efficiency.
Seamless Integration: Compatibility with existing e-commerce platforms to streamline logistics processes. 

Size of the quick service market in India 

Recently a report from financial services firm Chryseum noted that while India's e-commerce sector is registering an Annual growth rate of 14 per cent, quick commerce has expanded at an impressive 73 per cent annual growth rate during FY 2023-24. This highlights the significant shift in consumer behaviour towards faster and more convenient delivery options.

The quick commerce market in India is currently valued at USD 3.34 billion in 2024 and is projected to reach USD 9.95 billion by 2029, growing at a compound annual growth rate (CAGR) of more than 4.5 per cent over the forecast period (2024-2029).

In conclusion, quick commerce is rapidly transforming the Indian retail landscape. By offering convenience and speed, these businesses are capturing the attention of consumers and disrupting traditional retail models like Brick & Mortar Shops. While challenges remain, the potential for growth and innovation in this sector is immense. 

Differences between E Commerce & Quick commerce in a capsule form. 

 

 

 

 
By CA K Ranganatha Achar
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