Quick commerce seems to be in a tearing hurry not only to deliver, but also to amass as many e-commerce customers as they can. With 10-minute deliveries now encompassing not just groceries, but gold coins and even TV, ACs, and fridges, the categories and products on offer are expanding at a pace similar to their delivery periods.
And, even as the Q-comm players are rushing to outdo the other, established online companies are watching by the side, offering same-day delivery instead. As Harsh Goyal, director, Amazon Grocery India told FE, “Prime members get free unlimited same-day delivery across 10 lakh products and next-day delivery across 40 lakh products on Amazon. Our offerings are well rounded and serve our customer needs—both at scale and with speed.”
Flipkart’s earlier attempts at faster delivery failed when it launched SuperMart and FlipkKart Quick. It is currently eyeing same-day delivery under a new campaign, ‘Dawn to Dusk’, where it will offer grocery and items like watches and air pods. BigBasket’s quick-commerce arm BBNow aims to deliver orders within 22 minutes in 38 cities. BigBasket co-founder and CEO Hari Menon is on record saying, “Consumers did not want it, it was thrust upon them and they said why not.” Menon instead feels businesses should chase a more sustainable delivery within 15-30 minutes.
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Even Reliance Retail plans to launch a 30-minute delivery model, reportedly to be called JioMart Express, focusing on a wider assortment of products in June across eight cities, including Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, Hyderabad and Kolkata. The e-retailer will intensify its network of stores and kiranas connected through the JioMart partner initiative. It will not set up dark stores for ten-minute delivery but will optimise delivery routes using tech platforms. The product portfolio will be restricted to grocery initially, and extend to apparel and electronics subsequently.
Experts say this might be because quick commerce hasn’t been successful in western markets, and while quick commerce models in India have proved many wrong, will they be able to sustain their models with products beyond grocery is the big question.
Kushal Bhatnagar, associate partner at Redseer Strategy Consultants says over 75-80% of quick commerce gross merchandise value (GMV) comes from groceries, but the non-grocery share is increasing every quarter.
“Categories that are standardised and require basic discovery and logistics efforts such as beauty, small electronics and accessories, and standard apparels like innerwear, basic T-shirts have potential to sell well on quick-commerce. But non-standard categories that require customers to spend time on discovery or have complex logistics needs (like large appliances, apparels, furniture) are difficult to win on quick commerce,” he says.
Despite the speedy adoption and staggering growth, many feel the high-burn business model is not profitable. It requires players to get dark stores closer to customers and look beyond an average order value (AOV) of around Rs 500. “The additional and big-ticket product portfolio needs to add cost structure which also means additional capital, more in-store offerings and upkeep of real estate and supply,” shares a senior Gurugram-based executive working at a quick commerce firm, not wishing to be identified.
As Karan Taurani, SVP, Elara Capital, says, “Today customers are getting familiar with ordering groceries and other items within 10 minutes. It is a convenience-led game, and it is definitely eating up the market share of e-commerce, but only reliable deliveries will sustain the demand.”
For many brands like Good Glamm, Q-comm is a big sales avenue. “Blinkit is our top e-commerce partner for our MyGlamm POUT by Karan Johar lipstick. Across MyGlamm, quick commerce contributes close to 20% of our e-commerce sales,” says Ketan Bhatia, group brand director, Good Glamm Group.
“During special days, when the demand for gold and silver coins is high, it helps us reach a wider range of end consumers,” says MP Ahammed, chairman, Malabar Group, who supplied about 75,000 gold coins to Blinkit during the last Dhanteras and recent Akshaya Tritiya.
So even as Blinkit founder Albinder Dhindsa posts on X, “We’ve already delivered 13 of these since morning!,” for air coolers, and PlayStation 5 went out of stock within a week, reports have a word of caution. As per a report by JM Financial Institutional Securities, the multiple facets spread across sourcing, distribution, warehousing, inventory management, logistics, demand forecasting, dark store operations and customer experience, amongst others, need to work in sync for the model to be viable.
From: financialexpress
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