The Dawn of Quick Commerce: A Real Game-Changer for India’s Retail Future

In the retail industry, many trends have come, transformed, and then faded out. But nothing else has ever been as disruptive or fast-paced as the rise of what is now coming to be known as quick commerce-or q-commerce. Here is not just some new latest-in-town fad; it is a seismic shift in the way people shop. In India, the speed of change that q-commerce brings to the face of retail is simply phenomenal. We wish to share some insights on how this new model is unfolding, what is at stake for traditional e-commerce, and how local kirana stores-the lifeblood of Indian retail-understand and adapt to this new reality. 

What is Quick Commerce, and Why Should You Care?

In simpler words, quick commerce revolves around ultra-fast deliveries, completing within 10 to 30 minutes. Yes, you read that right—minutes, not days. This is undoubtedly different from standard e-commerce, where next-day or two-day delivery is the norm. Here lies the potential of catering to urban consumers who are craving immediacy and convenience.

Companies like Getir in Turkey, GoPuff in the U.S., and Gorillas in Germany have led this model around the world. In India, a rising middle class coupled with rapid urbanization and widespread smartphone adoption has created a perfect environment for q-commerce to thrive.

The Growth of Q-Commerce: Where We Are and What’s Coming Next

Let us give you some context on the explosive growth of this sector. The world’s quick-commerce market was valued at $20 billion in 2021. By 2025, that number is expected to balloon into $72 billion. Here in India, the growth trajectory is similar - jumping from just $0.3 billion in 2021 to an estimated $5.5 billion by 2025. Companies such as Zomato, Swiggy Instamart, Blinkit, and Dunzo are leading the charge in this fast-paced revolution.

All this is brought into operation through the invention of hyper-local supply chains. The operations are supported by dark stores: tiny, tactical warehouses located in residential places. But it is the technology that makes it all happen and is fascinating enough in itself, using AI-driven inventory management, optimised delivery routes, and micro-fulfilment centres to ensure that orders come within minutes.

Why Q-Commerce is Gaining Prominence in India: The Driving Factors

We can zero in on four major factors that are fuelling the quick acceleration of q-commerce in India? The first one is the pandemic. Lockdowns made people accustomed to having essentials and indulgences alike delivered to their doorsteps. Even now that things are slowly getting back to normal, people want this convenience, particularly in metro cities, where time is money.

India is critical in terms of scale of urbanization and adoption of technology. More than 900 million people have access to smartphones, and internet penetration is now more than 56% as of 2024; ultra-fast deliveries will just thrive on these numbers. Then, there is the demographic factor-millennials and Gen Z-comprising roughly 65% of the population-they’re driving this demand. Speed, convenience, and instant gratification through shopping is their motto.

Another significant facilitator is the funding for q-commerce. Swiggy raised $1.25 billion in 2021, with most of it pouring into Instamart. Furthermore, Blinkit, which is backed by Zomato, has also been largely invested in. As competition cuts across companies, it finds its way through cash burn to capture market share and keep customers coming for more.

Future of Quick Commerce in India

Here’s where it gets even more interesting. While q-commerce has already made its mark in the metro cities, tremendous scope exists for expansion into Tier 2 and Tier 3 cities. It will no longer be about groceries; expect deliveries of local specialities and region-specific products in these new markets.

For long-term sustainability, cost-efficiency will be the watchword for companies in q-commerce. Indeed, this model is grossly capital-intensive, but by leaning more into AI, automation, and perhaps even robotics, operational costs can be reduced while boosting efficiency. They will also have partnerships with FMCG brands, offering exclusive products and bundles that distinguish them from their peers and hence improve profitability.

Environmental sustainability is going to be another big one, as consumers are becoming increasingly aware of their contribution towards environment conservation. The pressure on q-commerce companies to go greener will continue to rise. Whether in regard to packaging, optimizing routes, or simply reducing carbon emissions by minimizing the number of miles travelled, sustainability will likely be the biggest sell.

What About Traditional E-Commerce? Can It Keep Up?

Now, for the elephant in the room; traditional e-commerce. Amazon and Flipkart are not going to sit idle while their share of delivery being gnawed at by q-commerce. Initiatives like Flipkart Quick and Amazon Fresh are steps taken up to meet this ever-growing demand for more rapid services that are mainly in grocery and essentials categories. However, things are blurring here between traditional e-commerce and q-commerce.

That being said, offline e-commerce still thrives in categories such as electronics, apparel, and high-ticket items where speed isn’t critical. However, to compete in grocery and essentials, they will need to rethink their supply chains and invest more in local warehousing and faster fulfilment options.

Kirana Stores: Compete or Collaborate?

So where does this leave kirana stores? Small family-run shops, these have been the bane and boon of India’s grocery market since well over three decades, commanding an astonishing 80% of sales. I’m rather sure that while q-commerce does indeed pose a threat, it also offers an innovative opportunity.

Kirana stores could, in fact, partner with, or develop their own, q-commerce platforms to sustain themselves. They can offer omnichannel experiences where orders are placed online but either picked up at home or collected at the store itself seem to offer a synthesis of both worlds. One of the strong advantages that kiranas enjoy is personalized service, which cannot be easily replicated on q-commerce platforms.

Kirana stores can offer a number of proposition unique to them and not possible through larger platforms—like credit options and loyalty programs centred on individual customers. We are convinced that it is in local relationships that most customer loyalty will rest in this changed retail landscape.

Our Final Take: A Mélange Retail Future

Quick commerce, as a concept, cannot be a fad as it begins to converge with the pressing needs of consumers-a faster, hassle-free shopping experience. Q-commerce seems to be the silver bullet that will forever change the status quo of traditional platforms of e-commerce and kirana stores. In all likelihood, what would emerge will be a hybrid retail environment where speed, convenience, and local service coexist.

Q-commerce stands to fundamentally reshape India’s large and diverse retail market. Who will last how much longer depends on what the next few years have in store for all concerned. Whether store owner or investor, or just a curious observer, we recommend you keep a close eye on things happening in this space, as it is only going to get more exciting from here.