Quick commerce is shaking up the Indian e-grocery industry, drawing in impulse buyers with the promise of superfast delivery in under 10 minutes.
Regretfully, I too have fallen for quick commerce. Until a couple of months ago, I would diligently plan my grocery shopping and place well-thought-out fortnightly weekend delivery orders on BigBasket, a decade old e-grocer. But now, the option of 10-minute delivery has broken my system. Lately, there have been too many unplanned purchases — thrice a week top-up on protein bars, greek yogurt, and instant coffee! I’m spending more money on delivery than I did a couple of months ago, and there are way more Coke cans in my fridge than I need.
I am not alone.
A September survey by market research firm RedSeer found there has been an increase in unplanned purchases of consumables by Gen Z and millennial Indians in the past 12 months. “There’s a fundamental shift in consumer behavior,” Abhishek Gupta, a consultant with RedSeer, told me. In December, the quick commerce industry clocked a revenue of $100 million, 70% of which came from Bengaluru, Mumbai, and Delhi, according to RedSeer.
The cost of this contrived behavioral shift is being paid by delivery workers. There’s been a spike in the number of reported vehicle accidents and increased public outcry over the pressure to deliver in less than 10 minutes, which leads to rash driving and traffic violations.
Industry participants themselves are flustered. Quick commerce is “force-fitting a consumer need which is actually not there in the market,” Flipkart Group CEO Kalyan Krishnamurthy told The Economic Times. Despite its reticence, the Walmart-owned e-commerce giant rolled out Flipkart Quick this week, halving its delivery time to 45 minutes. While 45 minutes doesn’t sound “quick,” it still falls under the “Q-commerce” category and is an illustration of market pressures forcing players.
Startups such as Zepto, Blinkit, Dunzo, and Swiggy are at the forefront of quick commerce in India currently. These firms have set up small warehouses, known as “dark stores,” that employ full-time staff. The new business model is chipping away at the 25 million customer base of incumbent BigBasket, which is trying to catch up. BigBasket, in December, introduced “BB Now,” a service that promises 20-minute delivery in Bengaluru. The company plans to expand this service across India by March.
More brands are acquiescing to the idea of quick commerce, as they are able to sell larger volumes; iD Fresh, which manufactures savory rice cake batter, witnessed its order volumes on quick commerce platforms surpass BigBasket in December. Beverage brand Paper Boat also reported an increase in impulse purchases.
Gupta says rider safety and stickiness are increasingly becoming a thorny issue for quick commerce firms as they scale operations. RedSeer’s survey found that less than 10% of riders see this as a long-term job. However, the business model is here to stay, with RedSeer estimating the addressable market for instant delivery to be around $5 billion by 2025.