Imagine sitting at an office where you have an eight-hour shift following which you will be heading home. You are jaded from the day's work, but as soon as you reach home you figure out you do not have milk or coffee or the usual grocery items. The list of edibles and supplies to be purchased is huge and you do not possess the strength to go to the supermarket. But you must purchase these supplies, so you start tapping on your phone with a few clicks you have all the items you need on the cart, and you place the order. No need to venture into the supermarket, no long queues, no traditional hassling with the vendors and the crowd, within minutes the items are at your doorstep. Welcome to the world of quick commerce, where speed and convenience redefine shopping, particularly in urban areas of India.

Rise of Quick Commerce in India

The rapid proliferation of mobile internet has altered the landscape of the retail market. COVID-19, the following lockdown and social distancing norms have pushed consumers towards online purchases, especially for edibles and groceries. According to NIQ Shopper Trends 2024, 31% of urban Indians now choose quick commerce for their grocery shopping. The study took a sample of 4500 customers in 16 cities including Delhi, Mumbai and Bengaluru. The study also revealed the popular categories like top-ups (39%) ready-to-eat meals (42%) and salty snacks (45%). According to Mr. Mitesh Dabrai, Executive Director for Consumer and Marketing Insights at NIQ India, shoppers today are more “discerning, price-conscious, and channel-agnostic”. The rise in demand for the purchase of essential categories along with urgency for immediate delivery and convenience has doubled the quick commerce usage. This rapid growth has increased the GMV (gross merchandise value) of quick commerce by 70% from 2022 to 2023. It is expected to reach $5.5 billion by 2025, as per a Red Seer Report. There had been an emergence of several players like Zomato-owned Blinkit, Swiggy Instamart, Dunzo Daily, Zepto, Country Delight etc. Quick commerce platforms' contribution to the online grocery market is expected to rise from 10% to ~45% in the coming years. It is expected to experience a robust compound annual growth of 27.9% between FY22 and FY27.

Operating Procedure of Quick Commerce Platforms

Quick commerce operates on a concept focused on rapid deliveries. It has moved beyond just ready-made meals to items like medicines, cosmetics, electronics, groceries, vegetables, fruits, etc. To achieve the goal of rapid deliveries the market has opted for an advanced network of micro-warehouses or dark stores. These micro-warehouses are located strategically in proximity to the delivery points. Platforms like Dunzo, Swiggy, Instamart and Blinkit have established 20-30 micro-fulfilment centres in major cities facilitating 10–20-minute delivery.

Technology plays a vital role in the process-

• Algorithms predict consumer demand
• Data analytics to optimize inventory management
• Route optimization software to shorten delivery time
• Automation and robotics to enhance the speed and accuracy of warehouse operations.

Reasons Behind the Growth of Quick Commerce

We can safely say that the pandemic and the subsequent social behaviour have been one of the prominent reasons for driving quick commerce growth. This era is marked by the growth of online markets. Millennials and Gen Z are the driving force behind this growth. The ever-busy lifestyle of the generation, rapid migration, concentration of population in cities, and urbanization prompted the growth of quick commerce platforms. Procter & Gamble Hygiene and Health Care Ltd states that the YoY growth of quick commerce platforms has more than doubled. This growth has made traditional small traders feel insecure and sidelined. The rising number of platforms seeking consumer attention by providing better value propositions to customers through consumer convenience, and expedited delivery services gives quick commerce platforms an edge in the retail market. Better services also increase customer loyalty. This loyalty brings in other consumers. Advanced data analytics and superior algorithms predict customer behaviour and buying patterns to offer them an experience depending on seasonality, regional influences and demographics.

The platforms are opting for a special tool from their toolbox called Moment Marketing. These platforms have seen a rise in sales during event days such as Diwali, New Year's Eve, Valentine's Day, and sporting events like the Cricket World Cup (CWC) final. Moreover, a wide range of categorizations such as pooja essentials and festive decorations for Diwali, roses, cakes, chocolates and bouquets for Valentine's Day, and India team jerseys for the CWC final. Beyond the traditional grocery items such as milk, egg, tea, coffee, bread, cookies, rice, lentils, spices, fruits, vegetables, meats and staples the variety has expanded into a wider retail spectrum, including beauty, electronics, home decor, wellness. D2C brands are capitalizing on these chances of product positioning with specific offers and manipulating the consumer perception of these platforms. The best feature is the on-demand delivery of products irrespective of time, weather or any other circumstances products are delivered instantly thus increasing their desirability.

Another engine for the growth must be attributed to the favourable government initiatives such as Digital India which have transformed the digital infrastructure of the country. Start-up India has pushed the growth of new-age startups. Unified payment gateways and Ru-pay have made online payments hassle-free, empowering consumers and businesses alike. Onboarding smaller vendors in the e-commerce and quick commerce ecosystem has increased because of the Open Network for Digital Commerce making the process inclusive and promoting fair competition.

The Way Ahead

Despite the surge in quick commerce in India, the price-sensitive nature of Indian consumers has posed a challenge. The abundance of delivery options and better value propositions are somewhat limited to the Tier 1 and Tier 2 cities. The changing consumer behaviour, technological advancements, favourable business environment, diverse customer demographics and the greater population dividend seeking instant gratification shows vast potential for quick commerce players.