More Indian households are turning to quick commerce for instant deliveries as lifestyle and shopping habits undergo a rapid change.
A study by research agency Kantar, covering the top nine metros in India, notes that q-commerce is growing at nearly 1.7 times of e-commerce within households in these cities, as the trend of instant shopping booms in urban areas. In other words, while e-commerce household growth stands at 19% in the top nine metros, q-commerce household growth is at 31% in the last one year, according to the research agency.
The household growth for q-commerce comes even as the penetration of the channel at 5.6% is just a quarter of that of e-commerce (21.8%) in the top nine metros.
“What this indicates is that q-commerce is growing rapidly, albeit on a small base. At a broader level, it points to the affinity that urban homes now have to q-commerce, which is a channel that has evolved recently,” K Ramakrishnan, managing director, South Asia, Kantar Worldpanel, said.
The study also says that premium categories are seeing significant growth in q-commerce versus e-commerce and other channels. While the number of homes picking up hand wash, floor cleaners, fabric softeners and washing liquids has grown between 50% and 135% in the last one year within the top nine metros, food products such as butter, cheese, oats, jams and basmati rice have seen a growth of 38-40% in the same period.
Households are also picking up larger packs within q-commerce, Kantar says, as players such as Zepto, Blinkit, Swiggy Instmart, BigBasket-owned BBdaily among others seek to increase their average order value (AOV).
Amarjeet Singh Makhija, partner and leader, start-ups and unicorns, PwC India, says that q-commerce players are increasingly looking to optimise their logistics and delivery costs as they grow their presence in existing and new markets.
India’s e-commerce market is expected to cross $160 billion by 2028 from $70 billion now, according to a Bain report, as online shopping booms, notably in tier 2 and 3 markets. Q-commerce, which is a $2.8 billion market within e-commerce, is estimated to touch at least $10-15 billion over the next few years.
To capitalise on this opportunity, q-commerce players are looking to increase their dark-store network beyond metros and tier 1 cities, while e-commerce players are penetrating Bharat aggressively with more fulfillment centres and warehouses, says Randev. This is pushing players to increase their average order values, he says.
For instance, e-commerce websites (such as Amazon, Flipkart) and beauty retailers such as Nykaa as well as q-commerce majors such as Zepto, Blinkit and Swiggy Instamart routinely remind consumers of their best-selling products on their app or website; direct consumers to similar products and categories based on the customer’s last purchase or browsing history and place notifications strategically on the order page or near the check-out tab indicating a flash sale or unique product or item that has good discounts to increase sales.