December 19, 2024
📰 FEATURE STORY
Is the Q-commerce race good for the sector?
Races are happening in neighbourhoods across India. The participants are Swiggy, Blinkit, Zepto, and more to come. The goal is to not keep their customers waiting for more than 10-15 minutes. This was impossible a decade ago when people’s routines involved going to the market to get groceries or fresh produce. It’s now only a few taps on an app.
The Quick commerce (Q-commerce) battle for supremacy is among the hottest in the Indian business landscape. It reflects people’s fast-paced lives, particularly in large urban metropolises. But how quick is quick enough? Is 10-15 minutes too long? Is the choice of instant convenience and gratification undermining health and safety protocols? Will the rat race go out of control?
Context
What began as last-minute impulse purchases has quickly become a necessity. Q-commerce is now a way of life for young and old professionals. They can reclaim valuable hours and not worry about traffic or parking. There’s also the convenience of getting almost anything in 10-15 minutes. It’s basically a personal butler.
Q-commerce was an organic evolution/offshoot from the bustling e-commerce sector. Companies realised the potential to deliver goods to people on the same day they ordered them. Customers responded by making more orders, and the business grew exponentially.
Then came the thought – what if we delivered essentials within a few hours of the orders? Companies like Zomato and Swiggy, already in the food delivery business, decided to jump in. They had the network bandwidth, logistics, and basic knowledge of deliveries. Why not deliver things other than food but quicker?
Companies like Zepto and BigBasket hopped onboard the Q-commerce train, and the race began in earnest. Safe to say the sector has exploded over the past few years. According to some estimates, as of March 2024, India’s Q-commerce market was worth $2.8 billion. Deloitte said it will be worth $40 billion by 2030.
Companies invested in dark stores, i.e., small spaces in densely populated neighbourhoods where goods are stored. This would ensure that orders could be fulfilled quickly.
As more companies, big and small, entered the race, the same-day promise evolved. It widdled down to 10-15 minutes. Speed was and is the name of the game. The faster one order gets delivered, another can be done, and another and so on. Companies wanted their apps to become a part of people’s routines, like checking e-mails or scrolling social media.
But is there a dark side to this much convenience? The demand for instant gratification, amplified by the pandemic, has put pressure on traditional retailers and raised concerns about job quality and safety. Will it hurt the sector in the long run?
VIEW: Transforming retail through convenience
The sector has evolved and responded to how people shop. One survey showed that 75% of online grocery buyers witnessed an increase in unplanned purchases in the past six months. There are obvious advantages for people – speed and convenience. If it’s becoming a habit among people to buy regularly, then companies need to capitalise on that habit formation. It gives them the time to spend on something else and not worry about putting together a shopping list and travelling from store to store.
The obvious question is whether traditional kirana and brick-and-mortar stores are going away. That’s unlikely. They’re also innovating with digital billing, free home delivery and return and replacements. With increased urbanisation, these stores also have a place in the broader retail landscape. Q-commerce has given Fast Moving Consumer Goods (FMCG) brands a new sales channel. Companies like Tata, Nestle, and Hindustan Unilever have all recorded a rise in sales thanks to Q-commerce.
The sector is an opportunity for growth, especially for smaller companies and startups. The business model is well established, and there’s a playbook. Smaller private brands have a platform to sell their goods to a larger consumer base. Not to mention, Q-commerce employs hundreds of people across stores and for deliveries.
COUNTERVIEW: It’s not all rosy
The ever-evolving rat race to deliver things as soon as possible could get murky and risky. In addition to essentials, companies are branching out to clothes, electronics, and even food. The latter is where things can get dicey. Shantanu Deshpande, founder and CEO of the Bombay Shaving Company, criticised the food-tech industry for the 10-minute rush to deliver cooked meals. He cited a Q-commerce co-founder telling him that the cooking time is 2 minutes while the delivery time is 8 minutes. That’s worrisome.
That’s a real problem that regulators have seemed to take note of. The Food Safety and Standards Authority of India (FSSAI) recently sought a meeting with companies like Swiggy, Blinkit, and Zepto to discuss food safety standards at a time when violations were being reported. These companies aren’t following standards and protocols. The best example is maintaining a minimum shelf life. LocalCircles, an independent community platform, reported several customer complaints about products with low shelf life or expired.
There are the issues of employee safety and job security. While the industry and some states have responded, there are gaps in letting riders earn a decent, liveable minimum wage. Collective bargaining isn’t on the horizon. If companies keep promising faster delivery times, who gets penalised if that isn’t fulfilled? Aren’t riders being put in danger while being asked to deliver as many orders as fast as possible? The “need for speed” model of Q-commerce could backfire when a billion people suddenly expect everything to be delivered in minutes and don’t stop to think about the consequences of impatience.
Reference Links:
- Quick Commerce: The ‘Instant Karma’ Of Indian Shopping – Businessworld
- Quick commerce | Rise of the quick brigade – India Today
- The future of quick commerce in India: A race against time or a race to nowhere? – Business Today
- Race to 10-Minute Delivery: How Quick Commerce Is Transforming India’s Grocery Market – Outlook
- “Cook time 2 min…”: Bombay Shaving Company CEO slams 10-minute delivery race – Fortune India
- Quick-commerce risks: A lot can go wrong when everything arrives in 10 minutes – The Economic Times
What is your opinion on this?
(Only subscribers can participate in polls)
a) The Q-commerce race is good for the sector.
b) The Q-commerce race is bad for the sector.
Previous poll’s results:
- There should be a revenue-sharing model between OTTs and telecom companies: 53.3% 🏆
- There shouldn’t be a revenue-sharing model between OTTs and telecom companies: 46.7%
🕵️ BEYOND ECHO CHAMBERS
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For the Left:
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