Quick commerce, altering India's retail and last-mile delivery landscape, stands out as a prominent trend in the country's e-commerce sector leveraging the widespread availability of mobile internet and the rise of e-commerce Quick commerce is challenging traditional retail concepts with a focus on rapid deliveries.
COVID-19 and the subsequent measures, such as lockdowns and social distancing, pushed consumers towards online purchases, especially in perishables and groceries, as they redirected their spending from non-essential to essential categories. As such, the rise in demand, coupled with an urge for instant delivery, has driven the rapid growth of the quick commerce segment. Due to this rapid growth, the gross merchandise value (GMV) of quick commerce in India reached US$ 2.3 billion in 2023, rising by more than 70% over the previous year. A number of players have emerged from such quick growth, including the extensions of established platforms like Zomato-owned Blinkit, Swiggy Instamart, Dunzo Daily, and Country Delight, and newcomers such as Zepto. Projections indicate a robust compound annual growth rate (CAGR) of 27.9% for the Indian quick commerce industry between FY22 and FY27. As quick commerce continues to reshape retail and last-mile delivery in India, its impact will likely be game changing, offering convenience and efficiency to consumers while challenging traditional retail models.
Process flow of instant delivery platforms
Technology plays a significant role in the quick commerce process in the following ways:
Overall, technology serves as the backbone of quick commerce platforms, enabling them to fulfil the promise of ultra-fast deliveries and unique customer experiences.
Rise of quick commerce in India
Quick commerce has recently reshaped the e-commerce landscape in India. The concept of instant deliveries has expanded beyond traditional ready-made meals to include various items like groceries, medicines, cosmetics, and electronics, combining the speed of instant market purchases with the convenience of home shopping. This innovative model caters to consumer demand for daily essentials, including groceries, vegetables, fruits, etc., promising to revolutionise the market. Key factors such as convenience, urbanisation, and busy lifestyles have influenced consumer behaviour, prompting companies to prioritise shorter delivery times. The pandemic further accelerated these needs as social distancing and work-from-home measures discouraged in-store visits.
The quick commerce industry in India has experienced rapid growth since the pandemic. It is projected to touch US$ 5.5 billion by 2025, as per a RedSeer report. Quick commerce platforms' contribution to the online grocery market is expected to rise from 10% to ~45% in the coming years. To adapt to this evolving landscape, the market has shifted from a singular central warehouse model to an advanced network of micro-warehouses or dark stores strategically located in proximity to delivery points, emulating the role of neighbourhood 'Kirana' stores. This model ensures a focused selection of high-demand items, typically within a two-kilometre radius. Notably, platforms such as Dunzo, Swiggy Instamart, and Blinkit have established 20-30 micro-fulfilment centres in major cities, facilitating 10-20 minute delivery services.
Source: RedSeer
Beyond consumer convenience, quick commerce offers considerable advantages to retailers in the following aspects:
Growth drivers of the quick commerce market
Role of quick commerce in last-mile delivery
Quick commerce significantly impacts last-mile delivery in India by introducing innovative solutions to address the challenges associated with traditional delivery models.
Favourable government initiatives
The following initiatives by the government have contributed to the growth of quick commerce in the country:
Road ahead
The rise of quick commerce in India represents a fundamental shift in the retail industry, led by changing consumer behaviours, technological advancements, and a favourable business environment. Quick commerce is set to change the Indian shopping experience, offering immediate satisfaction, unmatched convenience, and significant investment and growth prospects for industry stakeholders. However, as the industry evolves, the success of quick commerce companies will depend on their ability to efficiently manage delivery infrastructure in a cost-effective manner by using innovative technology and artificial intelligence.
Players are likely to prioritise growth in major cities targeting consumers that value convenience over cost, implement delivery fees for orders below a set amount, explore new revenue possibilities like advertising and FMCG partnerships, and focus on sustainability measures. The price-sensitive nature of India's market poses sustainability challenges for quick commerce players in the long term; however, a vast potential lies in India's diverse consumer demographics and varied needs.