How Consumer durables may thrive on Quick Commerce

Time Travel with Rakesh Kaul -Episode -10

Between 2021 and 2023, the quick commerce sector in India rode its sudden popularity surge and raised $4.2 Bn. according to Inc42 data. The quick commerce sector in India currently has a market size of $700 million and is likely to reach $5.5 billion by 2025. Swiggy Instamart, Zomato Blinkit and Zepto enjoy a market share in excess of 80% in the market.?

Recent reports suggest that the portfolio for instant deliveries ( 10 minutes or so) may now extend beyond the usual candidates like groceries and other essentials. Already event related items like Ganesha statues, dry fruits and Christmas trees found great traction during the appropriate periods of seasonality. Even audio wearables and beauty products are growing faster on this channel than any other. The stage is indeed set for durables and appliances to come to the instant acquisition party.?

While seemingly counter-intuitive, as they are usually thought-through purchases, there are many reasons why this will be the next big thing. Firstly, quick commerce is increasingly becoming a ‘habit’ for modern customers and they are increasingly comfortable with the platforms. Especially since the value proposition is clearly established and attractive discounts are available. This comfort level has led to the culture of ‘Urgency Addiction’, a term coined in a different context by professor Stephen Covey. To this, add the sheer convenience of home delivery and easy returns, to gain a win win solution.?

Durables and appliances can well ride on the habitual comfort of the platform. The decision to acquire, upgrade or simply replace may happen over a lengthy period of time, supplemented by copious doses of information search and evaluation of alternatives. However the preferred ‘buying’ conduit can well become the Quick Commerce channels, which have gained both trust and familiarity over multiple moments of truth. The last being a crucial factor and the sheer number of exposures lead to the formation of a base level delivery and quality assurance, an empathy which can be exploited by other categories.?

Secondly, we are increasingly seeing the termination of the ‘repair’ culture, when it comes to durables and appliances. Easy financing and the constant need to upgrade means that when something stops working, we seek to buy a newer version. To this, add the ‘moment of truth’, or rather failure, dimension for such categories. When the mixer grinder stops working, dinner is delayed or home delivery has to be summoned, thus the need to replace is immediate. The same is true for microwaves as the deeply tired nuclear working couple simply can’t afford to have dinner which is cold, so the need to change is now. When the decision to replace is instantaneous, there is very little patience for the process of replacement and that is the secret sauce of Quick Commerce.

However, a caveat must be raised in terms of stocking processes. Currently, the dark store model works for the grocery plus range of categories as buyer behaviour is predictable and sufficient data points exist on items most likely to be stocked or stored. This level of market intelligence and the sheer space required to store stuff may be areas to be addressed by players in this space. Maybe the delivery definition of Quick Commerce may be expanded further, to say half day versus ten minutes for the usual candidates, ‘relatively’ still quicker than any other form of acquisition. Also, in certain cases, there will also be an installation angle, current manual processes can possibly be fast forwarded by video tutorials.?

Thirdly, the ever growing gifting segment can be an area for the convergence of durables/appliances and Quick Commerce. Personal gifting, more precisely, increasingly thrives on immediacy, whether weddings, anniversaries or suitable milestones. A subset of the immediacy habit, for stressed modern households, can well be last minute gifting purchases, like kitchen goods and even microwaves. Of course, all the considerations mentioned in the last paragraph will have to be duly addressed.?

Fourthly, the sheer number of nuclear households in tandem with the UPI regime adds credibility to the future of these forays. According to Kantar data, at the all-India level, 50 per cent of the 318 million households were nuclear in 2022, up from 37 per cent of households in 2008. In the southern region, nearly 69 per cent of households are nuclear (50 per cent in 2008). In the context of the rapidly expanding gig economy, the home is now becoming a multi purpose destination, with full functionality of all durables and appliances a must. Quick Commerce has only partially fulfilled its potential in this aspect and there are many more frontiers to conquer.?

Consumer behaviour specialists place a lot of importance in the loss of translation between intent and action, as our rational mind takes over the emotional priorities. Masterful sales folks across categories, from fish markets to saree shops to electronic gadgets, work hard to expedite the decision making process after the desire is generated. For durables and appliances, this factor will surely come into play in the arena of Quick Commerce as customers have a very good reason to act immediately and visualise the fruits of their transaction. Thus, confirming the credibility of an emerging habit.?

The marriage of Quick Commerce and Durables/Appliances indeed looks promising as the customer seems to be the undisputed winner, aided by technology. It’s time for action and there is no time to lose.?I feel major consumer electrical and durable brands should take the plunge -Sooner the better it is .