Overview of India Quick E-commerce Market
Quick commerce is the newest genre in the e-commerce industry that promises delivery of goods within a few minutes. With people’s preference for quick deliveries growing amid the pandemic, several startups emerged in India to tap into the potential of quick commerce. Some key players that have established a strong foothold in this space include Blinkit, Dunzo, Swiggy Instamart and Zepto. These companies have raised substantial funding in the last year to fuel their aggressive expansion plans across Indian cities.
India Quick E-commerce Market Business Model and Operations
India Quick E-commerce players operate ‘dark stores’ or micro-warehouses in different local areas to ensure deliveries within a small radius. These stores are stocked with most frequently purchased items from nearby partner retail outlets or supermarkets. Customers can place orders through the company app, specifying their delivery address and preferred time. Once an order is received, it is immediately picked, packed and dispatched to customers within 10-30 minutes by delivery partners. The entire process is tightly managed and monitored through technology to meet the fast delivery promise. Some other key components of the quick commerce business model include:
– Extensive selection of daily essentials ranging from groceries to household supplies and personal care items
– Partnering with local merchants and retailers for seamless sourcing of products
– Operating exclusive fulfillment centers or partnering with nearby dark stores for last-mile
elivery
– Leveraging dense delivery networks and dispatch algorithms to optimize routes
– Providing real-time order tracking and communication with customers
– Relying on gig workers and part-timers rather than full-time employees to lower costs
Demands for Quick Commerce
There has been a significant surge in demand for quick commerce services owing to changing customer needs and preferences. The ongoing pandemic has further accelerated this growth as people prefer contactless and hassle-free delivery of goods to their doorsteps. Some of the key demand drivers for quick commerce in India include:
– Busy urban lifestyles and lack of time for grocery shopping has boosted demand for instant deliveries
– Growing young, internet-savvy population who are comfortable transacting digitally
– Impulse/unplanned purchase requirements that come up during the day
– Preference for seamless shopping experience and discovery of new merchants
– Demand for FMCG items during lockdowns or when stepping out is inconvenient
– Aspiration for choices, convenience and personalized services at competitive costs
Opportunities for Quick Commerce in India
Considering the untapped potential, quick commerce segment in India is expected to witness exponential growth in the coming years. Some big opportunities that exist for players in this space include:
– Large market: With rising internet penetration and digitization even in small towns, India offers a huge addressable market for quick commerce.
– Shift In Customer Behavior: Pandemic has changed customer preferences permanently towards instant, contactless deliveries which quick commerce caters perfectly.
– Blurred Lines With E-Grocery: As delivery time reduces, quick commerce is replacing planned online grocery shopping for many households.
– New Product Categories: Beyond daily essentials, use cases are expanding to medicine, flower/gift deliveries during occasions or sudden meal cravings.
– Supply Chain Enhancement: Technology and warehouse infrastructure can make delivery promise of under 15 minutes a reality in future.
– Global Ambitions: Model proven successful in India can be replicated in other international markets facing similar consumption patterns.
Current Challenges
While quick commerce presents massive growth prospects, certain challenges still need to be overcome:
– High Operational Costs: Maintaining dense fulfillment network across cities to deliver frequently with consistency requires deep capital investments.
– Customer Acquisition Expenses: Saturated online grocery segment requires continuous spending on promotions to attract new users and compete aggressively.
– Unit Economics: Average order value is low while delivery costs remain substantial. Margins can only widen significantly with scale and frequency.
– Competition: Global giants like Amazon are also replicating quick commerce model which can disrupt current market share.
– Regulatory Norms: Compliances around FSSAI licenses, product regulations, delivery workforce welfare need to be constantly tracked and followed.
– Supply Chain Fragility: Dependency on partners strains could impact service and quality if links aren’t managed seamlessly.
The Future Of Quick Commerce
Considering the addressable market potential far outweighing current penetration levels, quick commerce segment in India is likely to witness exponentially rising growth capital inflows and multiples mergers or acquisitions over the next 5 years. While competition will intensify, leading incumbents may come to dominate local areas through tighter networks, larger customer loyalty and innovative tech-based solutions.
In Summary, delivery times are also expected to shrink further as hub density increases and autonomous technology gets deployed for last-miles. With consistent delivery quality and experience, quick commerce is slated to emerge as a preferred shopping mode for millions of urban Indians looking for instant convenience in the coming decade.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it