Q-commerce sales double in a year for FMCG majors, now accounting for 33-36% of total e-commerce sales – Industry news

The share of e-commerce sales in total FMCG companies doubled in a year, according to executives from leading companies including Dabur, Parle Products, ITC and Nestle.

Share of q-commerce sales in e-commerce sales for the FMCG industry Currently, this indicator is 33-36%, while a year ago it was 17-18%.

In the case of Parle Products, the share of q-commerce in e-commerce sales has crossed 50%, said Mayank Shah, vice president of the company. However, the growth happened over the past 2-3 years, with sales in the channel flat.

ITCin its FY24 annual report released last week, said e-commerce and modern commerce together accounted for 31% of total sales in FY24, up from 17% in FY20. Most 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, has given the company strong growth, contributing 7% to domestic sales by March 2024. The share of e-commerce sales for Nestle India five years ago was 1.3%, as per its latest annual report. At that time, there was no q-commerce to drive the business, it said.

E-commerce as a channel, which includes q-commerce, contributes 7-10% to FMCG sales in India. Modern trade has a share of 12-15% and general trade around 80%.

The growing popularity of q-commerce platforms and aggression from players like Blinkit (from Zomato), Zepto, Swiggy Instamart and BBNow (from BigBasket) contributed to the sales growth, executives said.

“The speed of delivery and convenience of q-commerce have contributed to the rapid growth in q-commerce FMCG sales over the last year,” said Mohit Malhotra, CEO, Dabur India“For us, fast retail accounts for 30-35% of our total e-commerce sales. And we see that number growing,” he added.

Shah of Parle Products said q-commerce players have been innovative in their sales and distribution strategies. “For example, Zepto has Zepto Pass, which allows unlimited deliveries in a month for Rs 99. This helps increase deliveries,” he said.

According to experts tracking the market, 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 grocery orders.

A new report by Bain & Company finds that India’s leading q-commerce players have improved unit economics through a combination of scale, growth in average order value, higher order density and value-added fees.

For now, the q-commerce market is mostly limited to metropolitan areas and first-tier cities, Bain said, but players are expanding into second- and third-tier markets.

The report also said that by using geo-mapping technology to open dark stores, these platforms can deliver 60-70% of orders within 30-40 minutes.