Can Quick Commerce Dethrone Ecommerce?

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A decade ago, Flipkart transformed India’s shopping landscape with the launch of its flagship Big Billion Day Sale, quickly followed by Amazon’s Great Indian Festival in 2015. These two sales fundamentally transformed the festive season economy, steering consumers away from traditional brick-and-mortar stores and toward the convenience of online shopping.

What began as a trend has now become a phenomenon, with ecommerce platforms offering irresistible deals and discounts. In just the first week of last year’s festive season, ecommerce platforms recorded an impressive 19% year-on-year (YoY) rise in gross merchandise value (GMV) to INR 47,000 Cr.

However, with growing competition from quick commerce platforms, what will this year’s festive season sales look like?

Once doubted for their sustainability and relevance beyond metro cities, these platforms have proven the naysayers wrong, witnessing rapid growth over the past year. Now, industry experts predict that these platforms will take a significant portion of the festive season market, cutting into the market share of traditional ecommerce platforms.

As far as Karan Taurani’s, SVP of Elara Capital, anticipation goes, a significant portion of consumption, including purchases typically made at local kirana stores, will shift to quick commerce. “This is because customers today prefer the convenience of having products delivered rather than going out to buy them, especially given traffic constraints and the time and effort involved in shopping during the festive season,” Taurani said.

It is on the back of this convenience-led shopping that he sees same-store sales (SSG) growing by around 40-50%, with an additional 20-40% growth from new store openings. Overall, as per Taurani, the industry could see a growth rate of 70-80% this quarter.

The Era Of Instant Gratification

While speaking with industry experts, we learnt that the demand for convenient, on-demand shopping solutions is at an all-time high. According to Sudeep Sen, VP of GI Group Holding, the Indian customer today seeks instant gratification, which means they expect everything to happen as quickly as possible.

Quick commerce platforms initially introduced the habit of delivering groceries within 10-20 minutes, but they have since expanded their offerings to include beauty and personal care, home decor, gifting, electronics, and toys. This diversification is expected to significantly boost their performance during the festive season.

Furthermore, the Indian quick commerce platforms also seem to be excelling at analysing customer purchasing behaviour. This has allowed these platforms to tailor their product offerings and shopping experience to meet the growing demand for convenience shopping, an industry analyst said.

The expert added that these platforms have evolved to capitalise on key moments, delivering exactly what consumers want. For example, many quick commerce platforms have reported record sales on occasions like the Cricket World Cup Final, New Year’s Eve, Valentine’s Day, and Raksha Bandhan.

New Categories & Custom Offers To Boost Festive Quick Commerce Sales

Although groceries currently account for the largest share of orders on quick commerce platforms, categories like home decor, gifting, and pooja essentials are expected to gain more traction during the upcoming festive season.

Taurani observed that each festival sees an uptick in sales of specific categories. For example, apparel does well around the Onam season, while FMCG products, especially in the gifting segment, see a boost during Diwali.

“Gifting, in particular, has become a major focus for quick commerce platforms. Products like flowers and other niche categories are also gaining traction during festive periods, contributing to the overall growth of these platforms,” he said, adding that items like sweets, chocolates, and even cold drinks see increased sales due to more social gatherings during the festive period.

Echoing the sentiment, Sen said that apart from perishable goods, like fruits, vegetables, and milk, food items with slightly longer shelf life also see high levels of engagement and shopping activity on these platforms, especially during the festive season.

During Ganesh Chaturthi, for instance, quick commerce platforms dedicated special sections for pooja items, decorations, prasad, and gifts. Many even included Ganesha idols as part of their offerings.

A day before Ganesh Chaturthi, Zepto cofounder Aadit Palicha shared that the platform delivered over 4,000 Ganesh idols. In addition, 530 modak molds were being sold per hour on Zepto, surpassing the sales of ready-made modaks.

Similarly, Blinkit, Swiggy Instamart, and Zepto reported a significant surge in demand for festive essentials like rakhis, sweets, snacks, and gifts during Raksha Bandhan this year.

Pertinent to mention that quick commerce platforms have also expanded their offerings to include high-ticket items like electronics. Earlier this year, Blinkit even launched PlayStation 5 on its platform. However, according to the founder of a D2C wearables brand, the sale of smartphones and other expensive items is more of a marketing gimmick than a scalable business model.

Festive Surge To Boost Hiring

Meanwhile, the surge in festive orders is expected to boost the demand for labour, with workforce needs projected to increase by 25 to 30%.

Consequently, large companies are responding to this need by hiring more staff and implementing “scale-up training” programmes to enhance productivity and manage increased volumes.

According to Sen, there are two key aspects of the festive season — while many focus on delivery personnel, the crucial behind-the-scenes roles, like order processing, are often overlooked.

“These tasks require substantial staffing increases, even though these workers are not customer-facing. With the potential for refunds or refusals in every order, extra customer care executives are needed. Additional personnel are also required for mid-mile delivery and sorting products in warehouses,” Sen said.

Who Will Prevail In The Great Indian Quick Commerce Battle?

This season, many new players have entered the Indian quick commerce sector. While Zepto, Blinkit, and Swiggy Instamart have firmly established themselves in the quick commerce segment, a brigade of new players, including Flipkart Minutes, JioMart, and BigBasket, are looking to dethrone the existing dominance in the Indian quick commerce realm.

Notably, Flipkart has recently introduced its quick delivery service, Flipkart Minutes, and BigBasket is transitioning to a full quick delivery model. Meanwhile, Reliance Retail has also begun piloting an immediate delivery service for groceries and fast-moving consumer goods (FMCG) in select areas of Mumbai and Navi Mumbai.

Then there are players like FroGo, which focus on providing 30 to 90-minute deliveries, creating a niche in the ecommerce market that fosters 10 to 20-minute, next-day, or 2-3 day delivery options.

However, per sectoral experts, the key competitive advantage of quick commerce platforms will rest in their ability to offer faster delivery compared to traditional ecommerce.

For now, the upcoming festive season will be a crucial test for many players to prove their viability in a world where delivery times are shrinking and the list of consumer demands is getting longer.





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We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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Can Quick Commerce Dethrone Ecommerce?


A decade ago, Flipkart transformed India’s shopping landscape with the launch of its flagship Big Billion Day Sale, quickly followed by Amazon’s Great Indian Festival in 2015. These two sales fundamentally transformed the festive season economy, steering consumers away from traditional brick-and-mortar stores and toward the convenience of online shopping.

What began as a trend has now become a phenomenon, with ecommerce platforms offering irresistible deals and discounts. In just the first week of last year’s festive season, ecommerce platforms recorded an impressive 19% year-on-year (YoY) rise in gross merchandise value (GMV) to INR 47,000 Cr.

However, with growing competition from quick commerce platforms, what will this year’s festive season sales look like?

Once doubted for their sustainability and relevance beyond metro cities, these platforms have proven the naysayers wrong, witnessing rapid growth over the past year. Now, industry experts predict that these platforms will take a significant portion of the festive season market, cutting into the market share of traditional ecommerce platforms.

As far as Karan Taurani’s, SVP of Elara Capital, anticipation goes, a significant portion of consumption, including purchases typically made at local kirana stores, will shift to quick commerce. “This is because customers today prefer the convenience of having products delivered rather than going out to buy them, especially given traffic constraints and the time and effort involved in shopping during the festive season,” Taurani said.

It is on the back of this convenience-led shopping that he sees same-store sales (SSG) growing by around 40-50%, with an additional 20-40% growth from new store openings. Overall, as per Taurani, the industry could see a growth rate of 70-80% this quarter.

The Era Of Instant Gratification

While speaking with industry experts, we learnt that the demand for convenient, on-demand shopping solutions is at an all-time high. According to Sudeep Sen, VP of GI Group Holding, the Indian customer today seeks instant gratification, which means they expect everything to happen as quickly as possible.

Quick commerce platforms initially introduced the habit of delivering groceries within 10-20 minutes, but they have since expanded their offerings to include beauty and personal care, home decor, gifting, electronics, and toys. This diversification is expected to significantly boost their performance during the festive season.

Furthermore, the Indian quick commerce platforms also seem to be excelling at analysing customer purchasing behaviour. This has allowed these platforms to tailor their product offerings and shopping experience to meet the growing demand for convenience shopping, an industry analyst said.

The expert added that these platforms have evolved to capitalise on key moments, delivering exactly what consumers want. For example, many quick commerce platforms have reported record sales on occasions like the Cricket World Cup Final, New Year’s Eve, Valentine’s Day, and Raksha Bandhan.

New Categories & Custom Offers To Boost Festive Quick Commerce Sales

Although groceries currently account for the largest share of orders on quick commerce platforms, categories like home decor, gifting, and pooja essentials are expected to gain more traction during the upcoming festive season.

Taurani observed that each festival sees an uptick in sales of specific categories. For example, apparel does well around the Onam season, while FMCG products, especially in the gifting segment, see a boost during Diwali.

“Gifting, in particular, has become a major focus for quick commerce platforms. Products like flowers and other niche categories are also gaining traction during festive periods, contributing to the overall growth of these platforms,” he said, adding that items like sweets, chocolates, and even cold drinks see increased sales due to more social gatherings during the festive period.

Echoing the sentiment, Sen said that apart from perishable goods, like fruits, vegetables, and milk, food items with slightly longer shelf life also see high levels of engagement and shopping activity on these platforms, especially during the festive season.

During Ganesh Chaturthi, for instance, quick commerce platforms dedicated special sections for pooja items, decorations, prasad, and gifts. Many even included Ganesha idols as part of their offerings.

A day before Ganesh Chaturthi, Zepto cofounder Aadit Palicha shared that the platform delivered over 4,000 Ganesh idols. In addition, 530 modak molds were being sold per hour on Zepto, surpassing the sales of ready-made modaks.

Similarly, Blinkit, Swiggy Instamart, and Zepto reported a significant surge in demand for festive essentials like rakhis, sweets, snacks, and gifts during Raksha Bandhan this year.

Pertinent to mention that quick commerce platforms have also expanded their offerings to include high-ticket items like electronics. Earlier this year, Blinkit even launched PlayStation 5 on its platform. However, according to the founder of a D2C wearables brand, the sale of smartphones and other expensive items is more of a marketing gimmick than a scalable business model.

Festive Surge To Boost Hiring

Meanwhile, the surge in festive orders is expected to boost the demand for labour, with workforce needs projected to increase by 25 to 30%.

Consequently, large companies are responding to this need by hiring more staff and implementing “scale-up training” programmes to enhance productivity and manage increased volumes.

According to Sen, there are two key aspects of the festive season — while many focus on delivery personnel, the crucial behind-the-scenes roles, like order processing, are often overlooked.

“These tasks require substantial staffing increases, even though these workers are not customer-facing. With the potential for refunds or refusals in every order, extra customer care executives are needed. Additional personnel are also required for mid-mile delivery and sorting products in warehouses,” Sen said.

Who Will Prevail In The Great Indian Quick Commerce Battle?

This season, many new players have entered the Indian quick commerce sector. While Zepto, Blinkit, and Swiggy Instamart have firmly established themselves in the quick commerce segment, a brigade of new players, including Flipkart Minutes, JioMart, and BigBasket, are looking to dethrone the existing dominance in the Indian quick commerce realm.

Notably, Flipkart has recently introduced its quick delivery service, Flipkart Minutes, and BigBasket is transitioning to a full quick delivery model. Meanwhile, Reliance Retail has also begun piloting an immediate delivery service for groceries and fast-moving consumer goods (FMCG) in select areas of Mumbai and Navi Mumbai.

Then there are players like FroGo, which focus on providing 30 to 90-minute deliveries, creating a niche in the ecommerce market that fosters 10 to 20-minute, next-day, or 2-3 day delivery options.

However, per sectoral experts, the key competitive advantage of quick commerce platforms will rest in their ability to offer faster delivery compared to traditional ecommerce.

For now, the upcoming festive season will be a crucial test for many players to prove their viability in a world where delivery times are shrinking and the list of consumer demands is getting longer.





Source link

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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