India’s fast-growing quick commerce sector continues to expand rapidly, but experts noted that the profitability remains a major challenge for most brands operating on these platforms. According to industry estimates cited by ShelfRadar, fewer than 10 per cent of brands selling through quick commerce channels are profitable at a net margin level despite the segment crossing Rs 64,000 crore in gross order value last year.
The sector now operates more than 4,000 dark stores across over 400 cities, with nearly 60 per cent concentrated in the top 15 urban markets. However, ShelfRadar said the key challenge for brands has shifted from accessing data to making timely and effective decisions based on it.
The company noted that brand performance on quick commerce platforms is largely driven by three factors – advertising spend, discounting strategies and inventory management. Advertising costs have risen sharply as brands compete for visibility, with commerce-led ad spending increasing more than 24 per cent year-on-year. At the same time, average returns on advertising have fallen below 3:1.
Discounting strategies also vary significantly across markets, while inventory shortages can undermine both advertising and promotional efforts by making products unavailable at the point of fulfilment.
“What consistently surprises brand leaders isn’t any single metric but the speed at which these variables interact and compound,” Madhu Sudhan, Co-founder, ShelfRadar said.
Adding to it he mentioned that, “In one instance, a brand running a uniform 15 per cent discount nationally found through city-level analysis that four markets showed no change in sales velocity even at lower discount depths. The company reduced discounts by 8 per cent in those markets and redirected the savings towards media investments in underpenetrated Tier-2 cities, resulting in higher net revenue”.
ShelfRadar said the growing complexity of managing pricing, advertising and inventory across multiple cities and platforms is driving the adoption of AI-powered decision tools that provide real-time recommendations rather than static reports.
The company added that as quick commerce platforms evolve rapidly, the ability to act on data quickly is becoming a key competitive advantage for brands seeking sustainable growth.