Crispidea logo
Login

Where E-commerce Meets Instant Delivery: The Future is Quick Commerce!

What is quick commerce?

Quick commerce, commonly called Q Commerce, is a rapidly growing retail model that prioritizes speed and convenience. It's a subset of e-commerce that focuses on delivering products within minutes or hours, rather than days. This expedited delivery is made possible through a network of strategically located micro-fulfillment centers or dark stores.

Process flow of Q-commerce platforms

Quick commerce

Quick Commerce vs. Traditional E-commerce

Quick commerce and traditional e-commerce represent two different approaches to online shopping, each with its distinct features.

  • Delivery Speed: The primary difference lies in delivery speed. Q-commerce focuses on ultra-fast deliveries, often within an hour, catering to urgent needs such as groceries or emergency supplies. In contrast, traditional e-commerce typically has a longer delivery timeline, ranging from a few days to a week.
  • Business Models: Q-commerce companies employ specialized business models centered around small, local warehouses or dark stores. These facilities are strategically located to facilitate rapid deliveries to nearby customers. Traditional e-commerce, on the other hand, usually relies on larger, centralized hubs that can serve a broader area, albeit with slower delivery times.
  • Inventory Management: In Q-commerce, inventory is often limited to high-demand items, allowing for quick turnover and reduced storage costs. Traditional e-commerce platforms tend to offer a wider variety of products, which requires more extensive inventory management and greater storage capacity.
  • Customer Expectations: Q-commerce aligns with modern consumers' desire for instant gratification, as they expect their orders to arrive almost immediately. Conversely, customers using traditional e-commerce platforms are generally more accepting of longer wait times and do not anticipate same-day or hourly delivery.
  • Target Market: Q-commerce primarily targets urban areas where demand for quick delivery is high and logistics are manageable. Traditional e-commerce, with its wider delivery network, can reach a more geographically dispersed customer base.

While both Q-commerce and traditional e-commerce serve the online shopping market, they fulfill different customer needs and expectations. Q-commerce emphasizes speed and convenience for immediate requirements, whereas traditional e-commerce offers a broader range of products at the expense of quicker delivery.

Benefits of Q-commerce

Here are some key benefits of Q-commerce:

  • Speedy Deliveries: Q-commerce excels in delivering products within a short timeframe, often within an hour. This rapid service meets the growing consumer demand for immediacy, especially for essentials like groceries or urgent supplies.
  • Convenience: Consumers enjoy the convenience of placing orders from their homes or on the go, making it easier to obtain items without the need to visit a physical store. This is especially beneficial for those with busy lifestyles.
  • Enhanced Customer Experience: The quick delivery service enhances the overall customer experience by providing timely access to products. The anticipation of fast service can also lead to higher customer satisfaction and loyalty.
  • Localized Inventory: Q-commerce operates through local warehouses or dark stores, allowing businesses to stock high-demand items that cater to specific neighbourhoods. This localized approach can lead to a more relevant product offering.
  • Reduced Transportation Costs: By using localized delivery hubs, Q-commerce companies can optimize delivery routes, potentially reducing transportation costs and emissions compared to traditional e-commerce models that rely on longer-distance shipping.
  • Flexibility for Businesses: Q-commerce allows businesses to adapt quickly to changing consumer needs and preferences, offering the ability to pivot inventory based on real-time demand and trends.
  • Increased Market Reach: By focusing on urban areas with high demand for quick deliveries, Q-commerce can tap into new markets and customer segments that traditional e-commerce may not effectively serve.
  • Higher Order Frequency: Due to the convenience and speed of service, customers may place orders more frequently, leading to increased sales and revenue for businesses.
  • Competitive Advantage: Offering rapid delivery services can differentiate Q-commerce companies from traditional retailers, helping them attract and retain customers in a competitive market.
  • Integration with Technology: Q-commerce leverages advanced technology, including apps and real-time tracking, to streamline the ordering and delivery process, making it more efficient and user-friendly.

Global quick commerce market regional insights

  • The Asia-Pacific region holds the largest share of the quick commerce market, contributing over 50% of the global market in 2023. This growth is driven by factors such as increasing urbanization, higher disposable incomes, and greater awareness of quick commerce benefits.
  • North America follows as the second-largest market, capturing more than 25% of the global share in 2023. The market in this region is growing due to the rising demand for convenience and the growing popularity of online shopping.
  • Europe ranks third, with over 15% of the global quick commerce market share in 2023. This region's growth is fuelled by urbanization and the increasing demand for convenience.
Quick Commerce

The global quick commerce market is projected to reach an impressive revenue of $170.80bn by 2024, signalling a bright future for the industry. Additionally, the market is expected to grow at a steady compound annual growth rate (CAGR) of 9.24% from 2024 to 2029, leading to an estimated market value of $265.70bn by 2029. The number of users in the quick commerce sector is also forecasted to see significant growth, reaching around 0.9bn users by 2029.

 

The Rise of Quick commerce in India

Q-commerce has rapidly transformed the Indian retail landscape, offering ultra-fast delivery of groceries, daily essentials, and small household items, often within 10 to 30 minutes. This sector has seen considerable growth, especially in urban areas, driven by changing consumer expectations for convenience, speed, and digital access.

Key Drivers of Q-commerce Growth in India

  • Urbanization and Busy Lifestyles: India's urban population, with fast-paced lifestyles and limited time for traditional shopping, has embraced quick commerce for the convenience it offers. The demand for rapid delivery of daily essentials has surged, especially in metropolitan cities like Mumbai, Delhi, Bangalore, and Hyderabad.
  • Technological Advancements: The widespread use of smartphones, along with the growth of digital payments through platforms like UPI and RuPay, has made it easier for consumers to place quick orders online. Real-time order tracking and seamless app-based interfaces have enhanced the customer experience, making Q-commerce a preferred option.
  • Rising Demand for Essential Goods: The COVID-19 pandemic further accelerated the demand for home delivery of groceries, hygiene products, and medicines. Q-commerce platforms like Blinkit (formerly Grofers), Zepto, Swiggy Instamart, and Dunzo rose to meet this need, delivering essential items to customers in minutes.
  • Government Support and Initiatives: Government programs such as Digital India, Startup India, and Skill India have supported the growth of digital infrastructure and innovation, enabling Q-commerce companies to expand rapidly. Initiatives like BharatNet, which improves broadband access in rural areas, and ONDC (Open Network for Digital Commerce), which aims to onboard smaller businesses onto digital platforms, have further accelerated the sector's growth.

Major Players in India’s Q-commerce Landscape

Quick Commerce

 

  • Blinkit: One of the pioneers of quick grocery delivery in India, Blinkit rebranded from Grofers to focus on ultra-fast deliveries within minutes, mainly operating in Tier 1 cities.
  • Zepto: A fast-growing startup that promises deliveries in 10 minutes, Zepto has quickly expanded across major Indian cities, offering a range of grocery and daily essentials.
  • Swiggy Instamart: An extension of the popular food delivery service Swiggy, Instamart focuses on grocery and essential item deliveries, leveraging Swiggy’s existing logistics infrastructure​.
  • Dunzo: Dunzo operates as a hyperlocal delivery service that connects customers with local stores for quick deliveries of groceries, medicines, and other essentials.
  • BigBasket: A well-established player in the online grocery space, BigBasket is increasingly competing in the q-commerce sector by improving its delivery speeds and diversifying its offerings

Challenges of Q-commerce in India

Q-commerce in India faces several challenges:

  • Infrastructure Limitations: Many areas lack the necessary logistics infrastructure, affecting timely deliveries.
  • High Operational Costs: The cost of last-mile delivery can be significant, especially in densely populated or rural areas.
  • Consumer Expectations: Increasing consumer demand for speed and convenience puts pressure on delivery times and service quality.
  • Regulatory Issues: Compliance with various local regulations and permits can be complicated and time-consuming.
  • Competition: The Q-commerce space is highly competitive, with numerous players vying for market share, leading to price wars and reduced margins.
  • Supply Chain Management: Maintaining an efficient supply chain to ensure product availability while minimizing waste and stockouts is challenging.
  • Technology Adoption: Ensuring robust technology solutions for inventory management, tracking, and customer engagement can be resource-intensive.
  • Payment Systems: The reliance on digital payments can be a barrier in regions with lower digital literacy or access to banking services.
  • Consumer Trust: Building trust in product quality and service reliability is essential but can be difficult, especially for new entrants.
  • Seasonal Demand Fluctuations: Q-commerce businesses often face unpredictable demand, which can complicate inventory and staffing management.

Addressing these challenges is crucial for the growth and sustainability of q-commerce in India.

The following government initiatives has played a significant role in driving the growth of quick commerce in India:

  • Digital India has revolutionized the country’s digital infrastructure, enhanced digital literacy, and promoted the use of e-services.
  • Start-up India has created a supportive ecosystem that encourages innovation and growth among new-age start-ups.
  • Skill India has equipped the workforce with market-relevant skills and technology training, developing talent for the industry.
  • Unified Payments Interface (UPI) and RuPay has simplified payments, providing customers with seamless banking services at their fingertips.
  • BharatNet has improved broadband connectivity, enabling the expansion of quick commerce and e-commerce in previously underserved areas.
  • Open Network for Digital Commerce (ONDC) has broadened the reach of India’s quick commerce and e-commerce ecosystem by onboarding smaller vendors and promoting fair competition within the industry.
  • 100% FDI is allowed via the automatic route for entities engaged in B2B models, encouraging foreign participation and investment in the sector.

The quick commerce industry in India is projected to have a market size of USD 3.34 billion in 2024 and is expected to grow to USD 9.95 billion by 2029, with a compound annual growth rate (CAGR) of over 4.5% during the forecast period from 2024 to 2029.

 

India has 26.2mn Quick commerce users as of 2024. This number is projected to reach 60.6mn by 2029.

Quick Commerce

The quick commerce industry in India is transforming the way people shop, driven by changes in consumer behaviour, new technology, and a supportive business environment. It offers fast, convenient service and is attracting strong investment and growth opportunities. However, for companies to succeed, they must find ways to manage delivery efficiently and use technology like artificial intelligence to keep costs down.

Companies are expected to focus on expanding in big cities, catering to customers who value convenience, and may charge delivery fees for smaller orders. They might also explore new ways to make money, such as partnering with brands and focusing on sustainable practices. While India's price-sensitive market presents challenges, the country's diverse consumer base offers significant potential for the future of quick commerce.

- Aishwarya Dinesh (Equity Rsearch Analyst)

For equity reports on Retail and E- commerce CLICK HERE

Follow us 

Linkedin Instagram Facebook

Latest updated blogs

Share this article on:

Facebook
Twitter
LinkedIn
Shopping cart
Close