Q-commerce upends buying habits, retail channels

Quick-commerce (q-commerce) is rapidly growing, with 31% of urban shoppers using it for groceries, projected to reach $6 billion by FY 2025.

Quick-Commerce (q-commerce) or the faster, new form of e-commerce that delivers your online shopping in 10 to 30 minutes, is seeing exponential growth. A new report from consumer intelligence firm Nielsen IQ (NIQ) said 31% of urban shoppers are using quick commerce platforms (such as Blinkit, Zepto and Instamart) for monthly grocery shopping. In July, Redseer Strategy Consultants said q-commerce was redefining convenience and emerging as a game changer in urban living with projected 75-85% growth in FY 2025 to touch $6 billion in Gross Merchandise Value.

Q-commerce upends buying habits, retail channels

At present, 90% of the business for q-commerce firms comes from the large metros but most companies are planning entry into smaller towns. For this, Zepto has already raised funds and Swiggy has promised to allocate a sizeable part of the proceeds from its upcoming IPO to expand its q-commerce venture Instamart.

Competition from q-commerce has pushed traditional e-marketplace Flipkart to launch an 8 to16 minutes delivery service in Bengaluru to take on Zomato’s Blinkit, Zepto, BigBasket’s BBNow and Swiggy’s Instamart. All of them have ventured beyond groceries to add fashion, footwear, and electronics to their product portfolio. Blinkit created a buzz when it delivered iPhone 16 to consumers within minutes of its launch in India.

Q-commerce is disrupting our shopping behaviour which impacts other retail channels. “It is a hit with consumers and a scalable business model for companies,” said Anand Ramanathan, partner, Deloitte India. Post-covid, consumers are seeking variety, they are willing to experiment and pay for convenience. “This is pushing the impulse category purchases on q-commerce. Even planned purchases like monthly groceries are happening here,” Ramanathan said.

Redseer said the average Monthly Transacting Users (MTU) of q-commerce grew by 40% in FY2024. The MTU is expected to touch 20 million by FY 2026. The Average Order Value also increased by more than 15% in FY 24. In FY 2025, the existing MTUs are expected to spend 20% more on q-commerce platforms, driven by trust, habit formation and expenditure across non-essential items like beauty, home decor, gifting, and other general merchandise, Redseer said.

“On the supply side, efficiency in building dark stores and the way analytics is used for forecasting demand, has given q-commerce a big boost, Ramanathan added.

However, concerns around the effect of q-commerce on other retail channels abound. In a recent presentation at an industry forum, Vivek Gupta, managing director, Research, Ipsos India, said q-commerce is eating e-commerce for breakfast and modern retail (or big box stores) for lunch though neighbourhood kirana stores are holding up. “Fifty per cent of online grocery sales now happen through q-commerce,” he said.

Speaking to HT, Gupta said while traditional e-commerce (Flipkart, Amazon) will see their growth rates soften, the real threat from q-commerce is to the large format retail businesses. Kirana stores doing home-deliveries and extending credit to clients in their vicinity will remain secure, he added.

However, the FMCG distributors’ body, the All-India Consumer Products Distribution Association (AICDF), disagrees and it has written to the government to protect the interest of kirana stores. India has 30 million kirana stores but the deep discounts offered by e-commerce and q-commerce companies may push 25-30% of these local shops to shut down, they said. Some of the stores have already lost 30% of their business in the past three years.

Kirana business could further erode if q-commerce spreads to smaller towns and offers the convenience of under 30-minute home deliveries to consumers. “We thought it would remain a big city phenomenon. But it has grown faster as young India has changed the way it shops. This trend is irrespective of the town classes,” Ramanathan said, adding that he expects a deeper penetration of such new-age retail models.

Ipsos’s Gupta, however, feels q-commerce will not get the volumes to be profitable in small towns. “We’re only future-gazing but it is likely that fulfilment centres there will be your local grocers,” he said.

Q-commerce is the flavour of the season because of its sharp growth. While it may be growing at 100% it’s still on a very small base. An Elara Capital note said the q-commerce segment is currently 4.8% of India’s online retail market. However, it is projected to touch 21% by 2028 given its expansion beyond grocery into untapped categories like gifting, beauty and personal care, pet care and apparel.