Can Quick Commerce dethrone e-commerce?

A decade ago, Flipkart transformed the Indian shopping landscape with its flagship Big Billion Day Sale, quickly followed by Amazon’s Great Indian Festival in 2015. The two sales fundamentally transformed the festive season economy, drawing consumers away from traditional brick-and-mortar stores and towards the convenience of online shopping.

What started as a trend has now become a phenomenon, with e-commerce platforms offering irresistible deals and discounts. In just the first week of last year’s festive season, e-commerce platforms saw an impressive 19% year-on-year (YoY) growth in gross merchandise value (GMV) to INR 47,000 Cr.

But what will this year’s holiday sales look like, given the growing competition from quick-commerce platforms?

Once doubted for their durability and relevance outside of metropolitan cities, these platforms have proven skeptics wrong by posting rapid growth over the past year. Now, industry experts predict that these platforms will take over a significant portion of the holiday season market, eroding the market share of traditional e-commerce platforms.

As for Karan Taurani, Vice President, Elara Capital, expects, a significant portion of consumption, including purchases typically made at local kirana stores, will shift towards fast-paced retail. “This is because customers today prefer the convenience of having products delivered rather than venturing out to buy them, especially given the constraints of road traffic and the time and effort involved in shopping during the festive season,” Taurani said.

It is because of convenience-based shopping that he expects same-store sales (SST) to grow by around 40-50%, with an additional 20-40% increase from new store openings. Overall, Taurani believes the industry could see growth of 70-80% this quarter.

The era of instant gratification

Speaking to industry experts, we learned that the demand for convenient, on-demand shopping solutions is at an all-time high. According to Sudeep Sen, Vice President, GI Group Holding, the Indian customer today is looking for instant gratification, meaning they expect things to happen as quickly as possible.

The fast-paced marketplace initially started with grocery deliveries in 10 to 20 minutes, but has since expanded its offerings to include beauty and personal care, home décor, gifts, electronics, and toys. This diversification is expected to significantly boost its efficiency during the holiday season.

Moreover, Indian instant commerce platforms also seem to be excelling in analyzing customer shopping behavior. This has allowed these platforms to tailor their product offerings and shopping experience to the growing demand for convenient shopping, said an industry analyst.

The expert added that these platforms have evolved to capitalize on key moments by delivering exactly what consumers want. For example, many instant trading platforms have seen record sales during occasions like the Cricket World Cup final, New Year’s Eve, Valentine’s Day and Raksha Bandhan.

New Categories and Custom Offers to Boost Your Holiday Sales Quick Commerce

While grocery currently accounts for the largest chunk of orders on quick-selling platforms, categories like home décor, gifts and pooja essentials are expected to see greater demand during the upcoming festive season.

Taurani noted that each festival sees a spike in sales in specific categories. For example, apparel does well during Onam, while FMCG, especially the gifting segment, sees a boost during Diwali.

“Gifts, in particular, have become a major focus for FTAs. Products like flowers and other niche categories also gain popularity during festive seasons, contributing to the overall growth of these platforms,” he said, adding that items like sweets, chocolates and even cold beverages see increased sales due to increased social gatherings during the festive season.

Similarly, Sen said that in addition to perishable goods such as fruits, vegetables and milk, food products with a slightly longer shelf life also enjoy significant interest and purchasing activity on these platforms, especially during the festive season.

For example, during Ganesh Chaturthi, instant trading platforms dedicated special sections to pooja items, decorations, prasad and gifts. Many even included Ganesha figurines as part of their offerings.

A day before Ganesh Chaturthi, Zepto co-founder Aadit Palicha announced that the platform had delivered over 4,000 Ganesh statues. Moreover, 530 modak molds were being sold per hour on Zepto, surpassing the sales of ready-made fashionistas.

Similarly, Blinkit, Swiggy Instamart and Zepto have seen a significant increase in demand for festive products like rakhi, sweets, snacks and gifts during Raksha Bandhan this year.

It’s worth mentioning that flash trading platforms have also expanded their offerings to include high-priced products like electronics. Earlier this year, Blinkit even introduced the PlayStation 5 to its platform. However, according to the founder of the D2C wearables brand, selling smartphones and other high-priced products is more of a marketing gimmick than a scalable business model.

Christmas employment boost

Meanwhile, an increase in holiday orders is likely to boost demand for workers, with labor demand expected to increase by 25% to 30%.

As a result, large companies are responding to this need by hiring more workers and implementing “training for performance” programs to increase productivity and manage increased volumes.

According to Sen, there are two key aspects of the holiday season – while many people focus on the delivery staff, the key roles that play behind the scenes, such as order processing, are often overlooked.

“These tasks require a significant increase in staff, even if those workers do not have direct customer contact. Because of the possibility of returns or refusals on every order, additional customer service workers are needed. Additional staff is also needed for medium-distance deliveries and sorting products in warehouses,” Sen said.

Who will win the great Indian trade battle?

This season has seen a number of new players enter the Indian QSR sector. While Zepto, Blinkit and Swiggy Instamart have firmly established themselves in the QSR segment, a brigade of new players including Flipkart Minutes, JioMart and BigBasket are looking to dethrone the existing dominance in the Indian QSR sector.

Notably, Flipkart recently launched its Flipkart Minutes express delivery service, while BigBasket is moving to a full express delivery model. Meanwhile, Reliance Retail has also started piloting an instant delivery service for grocery and fast-moving consumer goods (FMCG) in select areas of Mumbai and Navi Mumbai.

There are also players like FroGo who focus on 30-90 minute deliveries, creating a niche in the e-commerce market that promotes 10-20 minute, next day, or 2-3 day delivery options.

However, according to industry experts, the key competitive advantage of quick trade platforms will lie in their ability to offer faster delivery compared to traditional e-commerce.

The upcoming holiday season will be a key test for many players to prove their worth in a world where delivery times are getting shorter and the list of consumer demands is getting longer.