Quick commerce volumes grow 25% ahead of competition in India

Major fast-moving-consumer-goods (FMCG) firms in India are seeing a sharp increase in the volumes sold through quick commerce methods (10-20 minutes) of between 20-25% versus other, longer delivery methods – but questions remain about the profitability of this cutthroat arena and how its future will pan out.

Why it matters

Rapid delivery or quick commerce is becoming a standard of urban life around the world, with research from WPP’s Wavemaker in the UK finding that it doesn’t just unlock growth from existing buyers but actually creates a new shopping occasion that can, in some instances, erode brand loyalty.

The need for speed

For Indian FMCGs like the beverage giant Coca-Cola, these smaller, upstart platforms are delivering higher conversion rates than their larger competitors, according to comments reported by the Economic Times.

Others, like Nestle, say that quick commerce is fuelling the strong growth across the firm’s total e-commerce sales.

Not so fast

We’ve been here before. Venture capital is flowing into q-commerce companies almost as fast as they can burn it and due to the nature of delivery (a driver can only fulfil so many 20-minute orders before you need to employ another, and so on) there is little sign that this is going to end well. For founders, the plan is surely to be snapped up by a behemoth or else face up to a probable Amazon showdown.

It also remains to be seen whether it is a brand benefit. Research by WARC into Instacart (a similar US platform but with advertising ambitions) suggests that gains in physical availability are key. However, it’s likely that quick commerce will also become a fragmented, highly competitive arena for brands to play in as platforms seek to sell those high-intent occasions.

Sourced from The Economic Times, WARC. [Image: Zepto]