Rise of Quick commerce in India- Explained Pointwise

Quick commerce is altering India’s retail and last-mile delivery landscape. It stands out as a prominent trend in the country’s e-commerce sector, leveraging the widespread availability of mobile internet and the rise of e-commerce.The sector is poised for massive growth, with India’s quick commerce market expected to reach US$5 billion by 2025 and US$9.94 billion by 2029 as per some estimates. Key growth drivers include changing consumer preferences, increased e-commerce adoption, and demand for convenience among millennials and Gen Z.

What is a Quick Commerce?

Quick commerce, or Q-commerce, in India, refers to ultra-fast delivery (often within 10-30 minutes) of essential goods like groceries and personal care items, leveraging hyper-local fulfillment networks and technology. It’s a growing trend driven by consumer demand for convenience and immediacy in urban areas.

What is the current status of quick commerce in terms of market size and growth?

1. Market Size: The Indian Q-commerce market, valued at $3.34 billion in FY 2024, is projected to reach $9.95 billion by 2029, growing at a staggering 76% YoY (Grant Thorton Bharat).

2. Market Growth: According to Chryseum Financial Services the Gross Merchandise Value (GMV) of quick commerce surged from $0.5 billion in FY22 to $3.3 billion in FY24, marking a staggering 280% growth over two years.

3. Market Leaders: The top three players, Zomato-owned Blinkit (46% market share), Zepto (29%), and Swiggy Instamart (25%)—dominate the sector (Motilal Oswal, FY 2025 Q1).

4. Consumer Base: Quick commerce caters primarily to urban households, with 20 million addressable households in metro and Tier 1 cities

5. Consumer Preferences: A Deloitte Consumer Survey (2024) found that 12% of urban consumers prefer Q-commerce, especially for food and beverages, driven by impulse purchases and immediate needs.

6. FMCG Sales: According to Deloitte, large FMCG brands have seen a two-fold increase in Q-commerce sales, now comprising 35% of their total online sales.

7. Adoption Trends: Quick commerce platforms are growing at a rate of 20-25% faster than traditional e-commerce platforms, reflecting a significant shift in consumer behavior.

Why is Q-Commerce so effective, and what makes it successful?

1. Improving Urban Convenience: Q-commerce caters to late-night needs and unaddressed demand, offering services when traditional retail shops are closed (EY-Parthenon). With India’s internet user base expected to exceed 900 million by 2025, increasing digital adoption will further fuel e-commerce expansion.

2. Dark Stores: The Backbone of Speed: These strategically located warehouses enable hyperlocal fulfillment, ensuring sub-20-minute deliveries.

3. Data-Driven Demand Forecasting: Platforms use customer app activity to predict seasonal trends, optimize inventory, and curate personalized recommendations.

4. Brand Awareness: According to IIM Ahmedabad, Q-commerce enhances brand visibility and consumer engagement for retailers.

• Workforce Availability: The availability of low-cost, employable manpower has been a key driver of Q-commerce’s efficiency and growth in India (EY-Parthenon).
• Expanding Reach to Tier-2 and Tier-3 Cities: Quick commerce is extending its footprint beyond metros, catering to rising digital penetration in smaller cities. Tier-2 and Tier-3 cities accounted for 60% of India’s total e-commerce demand in 2023, with a projected annual growth of 30% by 2025.

5. Employment Growth and Strengthening the Gig Economy:

• The sector is generating vast employment opportunities, especially for delivery personnel and warehouse workers. NITI Aayog’s report on the gig economy projects 23.5 million gig workers by 2029-30, making up a significant share of non-agricultural employment.
• The availability of low-cost, employable manpower has been a key driver of Q-commerce’s efficiency and growth in India (EY-Parthenon).
• No Time Restrictions, unlike retail stores that shut by 8 PM, Q-commerce fulfills late-night demand, capturing a previously unaddressed market segment.

6. Facilitating Emergency and Essential Deliveries:

• These platforms played a crucial role during Covid-19 lockdowns, ensuring uninterrupted supply of essential goods. Swiggy Instamart’s partnership with Earth Fokus during Bengaluru’s 2024 water crisis enabled the rapid distribution of water-saving aerators.
• Food, beverages, and daily essentials drive demand, while traditional e-commerce remains dominant for planned purchases (Deloitte, 2024).

What are the different challenges does quick commerce pose?

1. Anti-Competitive Practices: Quick commerce platforms face accusations of predatory pricing and deep discounting, aimed at eliminating competition (AICPDF complaint to CCI). Traditional retailers claim these practices create an uneven playing field, forcing small businesses to shut down.

2. Algorithmic Price Manipulation & Differential Pricing: Platforms allegedly use customer data (location, device type, purchasing behavior) to implement differential pricing, disadvantage certain consumers. This raises concerns about fairness and transparency in pricing strategies.

3. Threat to Traditional Retail: Millions of Kirana stores and distributors face losses or closure due to the aggressive strategies of Q-commerce platforms (AICPDF). The shift in consumer preferences toward ultra-fast deliveries and discounts has reduced footfall in local shops.

4. Worker Exploitation & Delivery Rider Risks: Gig workers face poor working conditions, low wages, and road safety hazards due to high-pressure delivery targets. Protests by delivery riders in cities like Bengaluru and Mumbai highlight the lack of social security, insurance, and fixed salaries.

5. Unsustainability of the Business Model: Quick commerce relies heavily on discounts, cash burn, and investor funding, making it unsustainable in the long term. E.g. Zepto reportedly burned through ₹1,200 crore in Q4 2024, averaging ₹400 crore per month (Industry reports).

6. Environmental Impact of Rapid Deliveries: The sector contributes to carbon emissions and packaging waste due to reliance on motorbikes and single-use plastics. Despite initiatives like plastic-neutral deliveries, implementation remains inconsistent (Zomato, Swiggy).

7. Carbon Footprint of Rapid Deliveries: The quick commerce sector is contributing to rising carbon emissions and packaging waste, with most deliveries relying on non-sustainable practices.  E.g. E-commerce transportation contributes significantly to CO2 emissions, with India accounting for 285g CO2 per parcel, making up 51% of total delivery emissions.

What are the Solutions for a Sustainable Quick Commerce Ecosystem?

1. Fair Competition & Regulatory Oversight: CCI intervention is essential to curb predatory pricing while fostering innovation (AICPDF complaint to CCI). Establish a National E-Commerce Regulatory Authority to monitor pricing, data protection, and monopolistic practices. E.g. EU Digital Markets Act & Digital Services Act.

2. Hybrid Retail Models & MSME Integration: Kirana store partnerships can blend hyperlocal expertise with Q-commerce efficiency (ONDC framework). Platforms should source inventory from MSMEs to ensure fair market access. E.g. China’s JD Daojia & Alibaba’s Freshippo.

3. Stronger Gig Worker Protections: Enforce Code on Social Security, 2020 to mandate fair wages, insurance, and safety measures. Diwali delivery worker video (2024) sparked debate on low pay; gig workers need fixed hours and accident coverage. E.g. California’s Proposition 22.

4. Delivery Time & Safety Standards: Regulate minimum delivery timelines for non-essential goods to prevent over-speeding and rider fatigue. Bengaluru traffic police fined riders ₹30.57 lakh in Nov 2024, highlighting risks of rushed deliveries. E.g. South Korea’s Delivery Speed Regulation: Caps maximum daily working hours.

5. Sustainable Logistics & Green Supply Chains: Introduce eco-friendly packaging mandates and promote EV-based delivery fleets under the FAME scheme. India’s e-commerce CO₂ emissions: 285g per parcel (51% of total delivery emissions); urgent shift to green logistics needed. E.g. Germany’s DHL GoGreen Initiative.

6. Data Privacy & Consumer Protection: Enforce Digital Personal Data Protection Act, 2023 to regulate customer data usage and pricing transparency. 48% of shoppers reported incorrect deliveries; 20% received counterfeit products—stricter consumer protection needed.

7. Standardized Grievance Redressal Mechanisms: Mandate transparent escalation processes for refunds, damaged goods, and complaints. A central ombudsman for consumer issues can speed up resolutions and boost trust.