“Union minister of Commerce and Trade, Piyush Goyal warned that, “e-commerce was eating into the sales volumes of small retail businesses and displacing them in the consumer delivery market.”
Abharana left home for an important law meeting in a hurry locking up everything to catch an Uber. Suddenly, her mom returned home from the office to collect urgent medical files only to find the house was locked. Irritated, she tried to reach her daughter.
Pat comes the reply…sorry, can’t take your call, what’s up?
An agitated mom snaps back … “Where are you? need to pick up files, get back home immediately?
Another reply, “Sorry…had to rush for an emergency meeting at Yelahanka”. Will send you the keys.
Fifteen minutes later, a Dunzo gig worker delivers the keys to Nirmala.
Thanks to Google Maps and the Internet, logistics have revolutionised delivery, enhanced speed and accuracy.
Blink it! Delivering deliciousness at your fingertips seems to be the bench mark of Insta-mart or Quick Commerce (QC) applications that bring conveyance stores to the doorsteps of households in minutes.
Quick Commerce pioneered by Sriharsha Majety, an alumnus of IIM Calcutta completes 10 years. In one of its posts on its website, IIM Calcutta congratulates Majety, for clocking 1.4 million orders daily on his Swiggy/ Instamart application alone.
The Bengaluru grown digital conveyance QC store has made life easy for millions of people across 500 cities in the country.
The insta-marts have perfected the art of providing a wide choice of goods to households not only in a short span of time, but cut down travel time and the travails of wading through traffic snarls.
Today the digital conveyance store has witnessed more than ten-fold annual expansion.
A JM financial investment bank estimates that all combined digital Quick Commerce (QC), “could contribute Rs. 65 to 70bn to the toplines of top 20 Consumer Packaged Goods (CPG) companies in the country in FY 24.”
“QC growth is not just to indulgence/essential categories -They are simultaneously expanding their presence in categories such as BPC, electricals & accessories, home/office essentials and festive essentials/gifting among others”, predicts JM Financial.
These growth predictions mount tremendous pressure on QC delivery market for everything and anything round the clock.
QC applications like, Swiggy, Instamart, Zomato, Blinkit, Zepto, DunzoDaily, Big Basket BB Now, Country Delight and Licious, all have promised to deliver the essentials in just 9 to 20 minutes.
On-time deliveries have helped the rise of delivery only cloud kitchens. Most of them are cost-effective and have lower overheads compared to traditional brick-and-mortar restaurants. QC also motivated culinary experts like mothers and grand-mothers to start ‘Amma’s Kitchen’ and created a niche market for home-made healthy and organic food.
The QC penetration is expanding beyond metro cities in India. As the demand increases, the employment in the sector is expected to grow further. “The demand for 10-minute deliveries with average product quality has increased between 2021 and 2024, with 73% of surveyed consumers willing to pay a premium for such convenience”, reports Datum Analysis.
The demand is solely attributed to the convenience factor. Smartphone penetration, rapid urbanisation, traffic snarls, lack of parking space and busy schedules have influenced households in ordering food online, especially in cities. Majority of them fall under the age group of 18-35. The tech-savvy prefer placing orders online because of wider choice at a very reasonable cost.
COVID-19 pandemic has also contributed to its growth in India due to safety concerns.
Intense competition among the players, advances in logistics and supply chain management have led to innovations and improvement in deliveries — rain or shine.
How is it possible to meet the myriad demands of the households in stipulated time? It’s a complex game that requires various elements to be managed in real time. These include dark stores / warehousing, inventory, supply chain, transportation and customer service to satisfaction.
In order to deliver products on guaranteed time, QC has moved their warehouses closer to the households, where picking and packaging is much faster. This comes with huge investments and meeting spiralling real-estate prices.
The game becomes much more complex when QC deals with a perishable product market. The players need the right choice of products to be stocked in the warehouse and an intelligent software that tracks goods and supply chain to meet the growing demands of the local markets.
Despite wafer thin profit margins, the QC has not compromised on their core strength of front and back-end operations which essentially have re-shaped the entire e-commerce space. With the sector heating up, the old war horses, Amazon and Flipkart are set to join the fray early next year, to clinch their pie in the lucrative 10-30 minute delivery period that has become the choice of the households.
Government on its part is sitting on the fence and monitoring whether there is any direct impact of QC on mom & pop stores. Speaking at an event organised by the Pahle India Foundation, a not-for-profit think tank last month, Union minister of Commerce and Trade, Piyush Goyal distanced himself from the Foundation’s report that QC had significantly increased employment in the country. Goyal warned that, “e-commerce was eating into the sales volumes of small retail businesses and displacing them in the consumer delivery market.”
Contrarily, Goldman Sachs says the online grocery market is doing well in India. QC platforms can “offer products at 10-15% cheaper than other ways of buying, which has allowed customers to put their trust in them.” QC platforms can also get pricing/sourcing advantages from the manufacturers, given their success and size.
It is an indisputable fact that QC platforms have not only transformed grocery shopping across Metros but increased employment opportunities to tens and hundreds of youth. Despite over-heads, operational costs and mounting losses, the QCs are hopeful that they have the dough to make it a tasty and saleable bread. Government on its part must encourage these platforms to have a tie up with mom & pop stores like they did with over 3 lakh restaurants to safeguard interests of small retailers. After all, consumers crave for immediacy and convenience.
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