Quick Commerce: An Innovation or Habit Disruption?

In the past few years, quick commerce, a model that offers delivery of things within minutes, has completely changed how eCommerce works. People are arguing about whether quick commerce is an innovation that makes life easier or a shift that changes people’s habits in ways that could be damaging. This blog post is my effort to delve into detail about the rise of quick trade, especially in India, and look at what it means for society as a whole.

The Rise of Quick Commerce in India

Quick Commerce has quickly grown into a major player in India’s online shopping scene. Zepto and Blinkit are two companies at the forefront of change.

Zepto began operations in 2021 and has experienced rapid growth, achieving a growth rate of 150% annually. Zepto’s market share increased from 15% in 2022 to approximately 30% by January 2024. This increase shows that people in cities need faster delivery services more than ever. Very recently, Zepto raised $340 million at a USD 5 billion valuation to boost its presence in the Indian market. Very recently, Zepto raised $340 million at a USD 5 billion valuation to boost its presence in the Indian market.?

Zomato also owns Blinkit , which has made significant strides. Because the company has a large network, it can offer rapid delivery services and get a big share of the market. The gross merchandise value (GMV) of quick trade in India rose to $2.8 billion in 2023, showing that there was a strong need for these services.

Several things have led to the success of these businesses:

Urbanization: More people are moving to cities, which means more people want delivery services that are quick and easy to use. This growth is also due to people living faster lives in cities and having less time to plan.

Technological Progression: Using complex algorithms and data analysis has made it easier to keep track of supplies and plan delivery routes. This rise is also due to more people having access to cell phones and fast internet.

Consumer Behavior: People, especially younger people, are becoming more and more interested in ease and speed. This growth is also caused by people not planning their personal lives well enough, wanting things “Right Now,” and living an “Instagram-like life” where the focus span is just for a few seconds.

JM Financial conducted a market survey to determine what drives people to use quick commerce and some of the findings are consistent with those previously mentioned.

Revenue of quick commerce across India from 2019 to 2028(in million U.S. dollars)

India’s quick commerce had been anticipated to bring in more than three billion U.S. dollars in 2024. By 2028, the revenue is likely to have grown by about $9 billion. With the addition of quick commerce, e-commerce has changed, especially when it comes to groceries.

There is also a fight for Quick Commerce between Amazon and Flipkart. Customers in some parts of Bengaluru can use Flipkart Minutes to get a wide range of items brought in as little as 10 to 15 minutes. These items range from food to smartphones.

Global Growth and Examples

The quick commerce approach has grown a lot around the world, not just in India. For lightning-fast delivery services, companies like Getir in Turkey and Gorillas in Germany have set the bar. Getir, for instance, has expanded its operations to multiple countries, demonstrating the scalability of the quick trade model.

Revenue of the quick commerce market worldwide from 2017 to 2027(in billion U.S. dollars)

The quick commerce market was expected to bring in about 98 billion U.S. dollars in 2022, up from an estimated 83 billion dollars the previous year. It is expected that the quick trade business will bring in more than USD 200 billion by 2027.

Globally, the quick commerce market is projected to reach $170.80 billion by 2024, with a steady annual growth rate of 9.24%, bringing the total value of the market to US$265.70 billion by 2029.

This growth is driven by several factors, some of which are as follows:

Customer Demand: More and more people want delivery services that come on the same day or even in an hour.

New Technologies: Improvements in mobile apps, GPS tracking, and path planning have made it easier to do business quickly. The evolution of AI has enabled predictive models, which further help these companies predict sales and ensure they are meeting customers' rapid demand in the shortest possible time.

Investment: A lot of money has been put into the field, which has helped it grow. Companies have raised a lot of money to grow their businesses. Having a 10-minute delivery requires a lot of investment in creating "Dark Stores" all around the country, as well as a lot of human resources who can deliver the products in the shortest possible time.

The rapid expansion of quick commerce has also led to some challenges. In the U.S. and Europe, which are more developed markets, some quick commerce companies have had trouble staying profitable and have had to cut back on their business operations.

Impact on Local Kirana Stores

People are worried about how the fast growth of quick commerce will affect traditional stores, especially Indian kirana shops. For decades, these small, family-run stores have been the backbone of Indian shopping. But quick commerce platforms’ ease of use and low prices are making it hard for them to stay in business. The Indian government is looking more closely at the quick commerce field. Several departments are looking into whether the rise of quick commerce is hurting the business of Kirana stores. Concerns have been raised by the Ministry of Consumer Affairs about steep discounts and the rise of “dark stores” on quick commerce platforms.

Changing Consumer Behavior

Indian consumers are also changing the way they act because of fast trade. In the past, Indian families would buy goods in large quantities to make sure they had enough. However, people are buying smaller amounts more often because it’s easier to do business quickly. This behavior change can be a problem because it indicates a lack of preparedness for daily needs and emergencies.

Additionally, relying on Quick Commerce for everyday items can lead to issues such as increased traffic and carbon dioxide emissions. These companies hire delivery people, which contributes to traffic and pollution in cities. According to a study by the World Economic Forum, the need for last-mile service in cities will rise by 78% by 2030. This will mean a lot more delivery trucks and more pollution.

We recently saw how executives from Blinkit and Zepto were marketing how people are delivering Rakhi and Sweets as last-minute orders from their platform. This shows how unprepared people are for some important events, and the rise of Quick Commerce is adding to that trend.?

Conclusion

Quick Commerce is a big step forward in e-commerce because it makes things easier and faster than ever before. Quick Commerce is undoubtedly assisting numerous individuals in securing immediate employment, addressing the issue of unemployment by leveraging a larger workforce, boosting sales for FMCG companies, and boosting vehicle sales.

However, this phenomenon also poses challenges, particularly for established stores and the environment. The chaos you witness on the road, with all these quick commerce delivery people, is growing every day. Don't overlook the escalating environmental consequences.

Consider me old school, but I come from a background, where we stock our monthly household groceries in one go. "You don't dig a well when the house is on fire," my mom used to say, emphasizing the importance of preparing for life's uncertainties. Quick Commerce is taking away that preparedness from our society, especially among the youngsters who believe they can order anything, anytime and at any cost.

As the industry continues to grow, it will be important to find a balance between the pros and cons of Quick Commerce to make sure it helps the economy and society.

What are your thoughts and views on the article? How do you see the growth and impact of Quick Commerce?

Thank you for reading. Feedback is welcome.