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Quick commerce is rapidly transforming the online grocery market, now accounting for 70 per cent -75 per cent of total e-grocery orders, according to a recent report by Bain & Company.
The report also highlighted that this marks a significant increase from around 35 per cent in 2022. The shift has been driven by strong execution, rising incomes, a wider range of available products, and the growing demand for convenience. It said "Robust customer traction, Quick commerce already accounts for 70 per cent-75 per cent of e-grocery orders (vs. approx. 35 per cent in 2022)". The report stated that the increasing popularity of quick commerce is also reshaping the competitive landscape. Major players such as Flipkart Minutes, Nykaa, and Myntra have entered the sector, along with new entrants like Swish and Slikk. This heightened competition is expected to further drive innovation and expansion in the industry. To keep up with rising consumer demand, quick commerce platforms are optimizing their storage and logistics. Companies are setting up 'back' dark stores in high-demand areas, which are connected to 4-5 'forward' dark stores. These back-end stores stock an additional 3,000-4,000 products, mainly premium and high-value items, to cater to a broader customer base. The report also highlighted how quick commerce is boosting the growth of direct-to-consumer (D2C) brands. Improved market reach and hyper-targeted marketing strategies are allowing D2C startups to use quick commerce platforms as a strategic sales channel. Many startups are now dedicating specific budgets to quick commerce to enhance their visibility and sales. The profit of quick commerce segment is also rising and there are several factors contributing to the increasing profitability. With the expansion of product categories and higher free delivery threshold, companies see a 40 per cent rise in average order value (AOV) between FY23 and FY25. Additionally, a greater share of high-margin products, such as D2C offerings, and new revenue streams like advertising are helping improve gross margins by 3-4 percentage points. Operational efficiency is also improving, with more dark stores now processing over 1,000 orders per day, leading to better cost management. Furthermore, logistical densification has reduced per-shipment costs by 25 per cent in 2024 compared to 2023. With these strategic advancements, Quick Commerce is set to continue its rapid growth, further strengthening its position as the dominant force in the online grocery market. (ANI)
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