As per industry estimates, quick commerce ad revenues were around 3,000 crore in CY24 and are set to surpass5,000 crore by the end of this calendar year. In other words, Zepto, Blinkit and Swiggy Instamart have not only disrupted the online retail ecosystem to reach $3.3 billion in FY24, but the category has also witnessed sharp ad revenue growth.
Digital ad budgets allocated to quick commerce have surged from an average of 3-5% to 15-20% in the last couple of years, reflecting its strategic importance for brands, observes Anshul Garg, managing partner and head of Publicis Commerce India. “Depending on category dynamics, brand objectives and performance metrics, some leading brands are now over-indexing their quick commerce ad spend to as much as 60% of their digital budgets. While e-marketplaces drive considered purchases, quick commerce excels in capturing impulse demand and immediate consumer needs, leading to rapid sales cycles and strong repeat buying patterns,” Garg points out.
Some reports suggest that the q-commerce market in India will grow at a 30-35% CAGR over the next few years, which means that ad spending will correspondingly rise.
These platforms have also evolved into discovery channels for emerging D2C brands, offering them a cost-effective way to gain market presence, explains Tejas Maha, group head, media, White Rivers Media. “Smart brands are moving beyond basic targeting to leverage behavioural insights, recognising distinct purchasing patterns such as morning dairy shoppers and late-night dessert seekers. The real opportunity lies not just in faster delivery, but in creating new consumer behaviours and purchase occasions that didn’t exist before,” remarks Maha.
Is the growth in quick commerce advertising eating into e-commerce revenues? In FY24, Amazon and Flipkart cumulatively earned `11,600 crore in ad revenue. Experts opine that it is significant that q-commerce ad revenues are about a quarter of what the e-commerce giants are earning. Little wonder then that Amazon is already considering getting into q-commerce.
According to Vikas Nowal, CEO at Interspace Communications, given the meteoric rise of this segment, it is inevitable that q-commerce will eventually eat into e-commerce ad revenues. He observes that some brands are diverting as much as 25% of their e-commerce ad budgets to q-commerce. Impulsive consumer purchases in a low involvement category are driving this shift, says Nowal.
Some experts point out that while quick commerce ad spending might initially come at the expense of e-commerce advertising, there isn’t any reason for e-commerce platforms to worry yet. “Brands will likely continue spending on both but adjust their mix based on product category, consumer demand, and ROI. For instance, if a brand sees that quick commerce is driving higher conversion rates in urban areas, they might increase spending there while maintaining e-commerce budgets for wider reach,” says Nishant Gopalia, senior vice-president for media and MarTech, Tonic Worldwide. He cautions that brands must evaluate ROI carefully before scaling up investments in q-commerce, which still brings certain challenges such as shorter consumer attention spans, limited customer data and insights and lower reach.
Publicis’ Garg adds that success would be determined by prudent investments, analysing performance rigorously, and continuously refining strategies to maximise ROI in this fast-moving ecosystem.