The contribution of quick commerce sales to the overall e-commerce sales of fast-moving consumer goods (FMCG) companies has doubled in a year, executives from top firms, including Dabur, Parle Products, ITC and Nestle, have said.
The share of q-commerce sales within the e-commerce sales for the FMCG companies now stands at 33-36% against 17-18% a year ago.
For Parle Products, the share of q-commerce in their e-commerce sales has breached the 50% mark, said Mayank Shah, vice-president of the company. But the growth has happened over 2-3 years, with consistent sales on the channel.
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ITC, in its FY24 annual report released last week, said e-commerce and modern trade together accounted for 31% of total sales in FY24 against 17% in FY20. The bulk of the growth was driven by q-commerce, the company added.
Nestle India chairman and managing director Suresh Narayanan said in a recent media interaction that e-commerce, led by q-commerce, had delivered strong growth for the company, contributing to 7% of domestic sales till March 2024. The share of e-commerce sales for Nestle India five years ago was 1.3%, according to its latest annual report. At that time, there was no q-commerce driving the business, it said.
E-commerce as a channel, which includes q-commerce, contributes to 7-10% of FMCG sales in India. Modern trade has a 12-15% share, and general trade about 80%.
The growing popularity of q-commerce platforms and the aggression displayed by players such as Blinkit (from Zomato), Zepto, Swiggy Instamart and BBNow (from BigBasket) have contributed to the growth in sales, executives said.
“The speed of delivery and convenience of q-commerce has contributed to the spurt in q-commerce FMCG sales in the last one year,” said Mohit Malhotra, chief executive officer at Dabur India. “For us, quick commerce is 30-35% of our total e-commerce sales. And we see this number growing,” he added.
Parle Products’ Shah said q-commerce players have been innovative with their sales and distribution strategies. “For instance, Zepto has a Zepto Pass, which allows unlimited deliveries in a month for Rs 99. This helps push more deliveries,” he said.
While Zepto introduced a platform fee of Rs 2 for select users in March, Swiggy Instamart and Blinkit do not charge a platform fee for their grocery orders, according to experts tracking the market.
A recent report by Bain & Company said leading Indian q-commerce players have improved unit economics through a combination of scale, average order value growth, higher order density, and value-added fees.
While q-commerce is largely limited to metros and tier I cities at the moment, players are expanding to tier II and III markets, Bain said.
The report further said by leveraging geographical mapping technologies to open dark stores, these platforms can deliver 60-70% of their orders within 30-40 minutes.
From: financialexpress
Financial News
