Quick Commerce Picks Up Pace In Urban India As New Players Eye Sweepstakes

Amazon India is planning to launch a 15-minute delivery service later this month. This will take-off in Bengaluru. With this, the ecommerce giant makes a formal entry into the rapidly growing quick-commerce sector. Amazon’s competitor Flipkart has had has a head start with its ‘Minutes’ quick commerce delivery initiative. With the entry of the two global giants, Indian retail industry is poised to witness some drastic changes in the coming days.

After all, quick commerce is the fastest growing segment of the Indian retail industry in recent quarters. Leading FMCG companies have acknowledged that quick commerce has emerged as the fastest growing channel for them, an aspect that they are brandishing while approaching investors. Meanwhile, analysts are noticing some slowdown in ecommerce space in segments where quick commerce players are operating. Even kirana stores have been reporting a fall in sales due to the fast pace with which quick commerce is making inroads in metro cities.

Though there is no concrete evidence yet that shows quick commerce segment eating into ecommerce and brick and mortar retailers, some early trends towards this are quite visible. Currently, Indian quick commerce landscape is dominated by Zomato-owned Blinkit, Swiggy Instamart, Lightspeed-backed Zepto, the big three players around. BigBasket's BB Now and Reliance Retail’s Jio Mart are the other players. Slowly but steadily, other players are also joining the bandwagon. To seize the initiative, fashion retailer Nykaa announced that it would start quick commerce delivery of its beauty brands. Given the trend, many other companies are likely to follow suit in the days ahead.

Against this backdrop, it is likely that consumer behaviour and preferences are likely to change rapidly. And this change will be more distinct in urban areas. Currently, quick commerce is providing the comfort of convenience to consumers with a very quick delivery time. Urban India, which is time pressed given the traffic, workload and other issues, has given a thumbs up to this business model. Subtly, such quick delivery is changing the consumer preferences rapidly.

There is no denying that many such goods and services are likely to be available on this mode. This will definitely impact the traditional distribution channel of FMCG industry like retailers. Even large ecommerce players and big retailers will see demand for very fast delivery growing at a rapid pace. In hindsight, this growth will put the livelihood of small retailers in peril.

Similarly, big retailers have to change their business model to compete with the new trend. Although, seen as an urban phenomenon, analysts opine that the possibility of it being a rural trend is remote because rural regions may not provide economies of scale. However, ecommerce players may look at reducing delivery time of items in those regions. Irrespective of the outcome, adoption of quick commerce is likely to gain momentum in the coming days. As a result, all stakeholders have to devise strategies to cash in on the emerging opportunities. Other players with a futuristic acumen have to devise plans to protect themselves from such disruption. Survival of the smartest is the name of the game.