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Quick Commerce – End of the Road?

Quick Commerce – End of the Road?

by Editor
August 2, 2023
in FMCG Food, Supermarkets
Reading Time: 3 mins read
0

Just before Covid-19 lockdowns became a norm in India, Circa 2019, e-commerce in India was largely discounts-led. Grocery E-comm was almost indistinct and many startups shut down after raising several million dollars. From April 2020 onwards, things took a U-turn, with most Indians fearing to step out of home, due to possibilities of getting caught with infections from the neighbourhood shops.

Kirana Stores, Grocery retail supermarkets and Salons were the worst impacted as there was a significant touch and feel between fellow customers / staff. That is when the local retailers, small and big pivoted home delivery and used native methods such as ordering through a phone call all the way up to sending lists on Whatsapp. Online payments gained traction too, with the rise in UPI and startups such as Dunzo, Swiggy, Grofers (now Blinkit) took the opportunity to scale their services. The big daddt of grocery e-comm, Big Basket, which had just been acquired by the Tatas stepped up heat while Amazon Grocery and Flipkart too pitched in with lucrative price offers.

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Cut to late 2021, ordering household and grocery items online (through phone calls, sending lists on WhatsApp as well as ordering on Apps) became a norm. Enter Zepto. Two young grads from Mumbai set forth with a delivery promise of 10mins… The top 100 brands used by Indians were all available from a neighbourhood dark store and would reach one’s doorstep in less than 10mins. Without a delivery fee.

From seasoned Retail Experts to Academicians, neighbourhood shopkeepers to learned bankers, everyone wondered how would this model work profitably. Meanwhile, the top think-tanks at respectable Investment houses were funding the dream run of a few startups, who drained 2x-3x everyday than what they earned as revenues (not profits, there was none!). By mid-2022, the party was almost over.

Indians, never really wanted anything so quick, so the concept of Q-Commerce was always a sham, if not a bubble at best, waiting to burst one day. Most Indians, who earn Rs.5-10 lakh a year were cost conscious and ran a tight ship of the household. Consumables were bought as and when required, so the ticket sizes were always low. Remember, this consumer segment accounts for over half of the entire consuming segment of food and grocery in India.

Households earning Rs. 10-40 lakhs pas shopped once or twice a month at air-conditioned super markets (hypermarkets in some towns too) and ensured their savings on the bill was higher than parking costs in Malls, where these large format retailers operated from. This segment accounts for 30% of the over all pie. The top 10% of the consumer segment and the bottom most 10% never really cared for a shopping habit nor were conscious about the brands they consumed or their pricing. The extreme top end would but what they wanted anyway and the bottom end would buy only for what they have in hand.

According to a survey report released yesterday by Local Circles, only 3% of consumers were willing to pay a delivery fee for Q-Commerce, read delivery within 3 hours. According to the agency, which conducts a lot of hyperlocal as well as national level surveys, 20,751 respondents were surveyed. Almost a year back, the same agency had published a report surveying 30,000 respondents all India, of which a third of them relied on Q-Commerce. It is a dichotomy that consumer preferences have changed drastically over the past 24 months and how!

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