Quick, quicker, quickest: The impatient Indian fires up an industry

Instant delivery firms diversify to high-end consumer durables & e-comm majors enter the space

How quickly can you satisfy a consumer’s needs? And, in what all categories? Companies, big and small, are getting into this race of pace. The latest to announce its foray into quick commerce is Reliance’s Mumbai-headquartered ecommerce firm, JioMart. Flipkart, another Indian e-commerce major, too has made this intention public on more occasions than one.

So where does this leave existing quick commerce players such as Blinkit, Instamart and Zepto?

Well, they too are upping the game. No longer are they restricting quick commerce to fast-moving consumer goods (FMCG). The players are getting into high-end consumer durables. Looking for a cooler? It will be at your doorstep in 10 minutes. Need fashion jewellery? Ten minutes, and you’ll have it. At the pool and have forgotten your swimming costume? Sweat not; we’ll deliver one to you in a jiffy.

Quick commerce companies’ 10-minute delivery promise, hitherto limited to groceries and essentials, has expanded to high-value consumer durables. JioMart, incidentally, has kept the delivery time to 30 minutes while announcing that it will get into this space as early as next month.

The instant delivery market is on fire, and fuelling its growth is the impatient Indian consumer.

According to a July 2023 report by Wunderman Thompson, a New York-based global marketing communications agency, 38 per cent of Indian consumers are impatient and expect deliveries within two hours.

Quick commerce firms are obliging. From boAt speakers to Apple smartwatches, their aim is to become one-stop destinations for anything and everything – the challenge posed by giants like Reliance, Amazon and Flipkart notwithstanding.

“Apart from metropolitans, the quick commerce model is also gaining traction in cities such as Vizag (Andhra Pradesh), Nagpur (Maharashtra), Kochi (Kerala), Jaipur (Rajasthan), and Lucknow (Uttar Pradesh),” says Somdutta Singh, founder and chief executive officer (CEO) of US-based e-commerce solutions firm Assiduus Global.

According to Bengaluru-based strategy consultancy Redseer, the industry currently has a gross merchandise value of $2.8 billion.

“You sort the vacation approvals, we’ll sort your luggage,” posted quick commerce platform Zepto on its LinkedIn page recently while launching its partnership with Nasher Miles, a premium luggage brand. 

Days later, rival Blinkit, which is owned by restaurant aggregator and food delivery firm Zomato, announced a partnership with Mokobara travel bags. Its customer-wooing tagline read: “Last-minute travel planning will never be the same again.” 

Not to be left behind, food tech and delivery platform Swiggy merged its online retail division, Swiggy Mall, with its quick-commerce division, Instamart, in April.

“Higher margins on premium products can help offset the tight margins on groceries, creating a more sustainable business model,” says Singh explaining the rationale for these moves.

Weight of the cart

With costlier brands finding space on quick commerce, the average order value (AOV) is increasing.

According to investment banking firm JM Financial, the AOV for quick commerce has now increased to Rs 450-Rs 500 from Rs 350-Rs 400 a couple of years ago. 

Saurabh Parmar, a New Delhi-based fractional chief marketing officer, says that this shift is also changing consumer perception about these platforms, which are otherwise associated only with utilitarian, everyday items.

Tricky terrain

While reports focus on the growth trajectory of quick commerce with the entry of consumer durables, experts and customers draw attention to the challenges.

Delhi-based dentist Ashmita Bhardwaj, who has ordered electronic items like speakers and earphones from Blinkit, says she might not trust quick commerce for something of higher value such as a mobile phone. “Quick commerce may not be the choice for products that require greater research and demand more options,” she says. 

As the value of the product goes up, concerns around cancellation, return and exchange policy also increase. 

“Quick commerce expanding into categories where consumers are already used to a no-questions-asked return policy is an area that needs careful treading upon, especially when it comes to high-value purchases,” says Bengaluru-based retail expert and consultant Madhumita Mohanty.

Some, however, differ in their opinion. Bengaluru-based pilot Priyank Verma, who ordered a Sony PS5 gaming station from Blinkit, says he found the process smooth. “I can opt for more such products from the site.”

Choices on these platforms, though, are limited, points out Delhi-based advertising professional Sanchita Bhatia. Bhatia had bought a pair of Giva earrings from Blinkit. “While quick delivery is an incentive, these platforms charge for this benefit,” she says. “The options are also limited.” 

Apparel as a category would be tempting for these firms, given the high margins it offers. “But one should also take into account the inordinately high rate of returns in the fashion segment,” says Mohanty. “That can be a double-edged sword.”

That said, Zepto has gone ahead and announced the availability of popular makeup brands such as Sugar, Lakmé, Plum and Maybelline. Blinkit has also announced its partnership with Karan Johar’s MyGlamm POUT lipstick.

An even timeline

An analysis by Bank of America in March estimated that quick commerce can reach 25 million households in India, with an average spend of Rs 4,000 to Rs 5,000 per month in the next 3-5 years.

Though the idea is to change the margin mix by going for high-margin products, Mohanty says, “if quick commerce deals in categories like furniture and consumer durables, there is additional back-end team requirement, which means additional costs or tie-ups with such providers. This, again, means additional margin leakage.”

Parmar adds that moving to high-margin, non-essential items can fundamentally change quick commerce, and it may no longer remain “quick”. 

“It's virtually impossible to deliver an air-conditioner with a packet of salt or a bar of chocolate within 10-15 minutes,” he says. “The delivery time may go up to 30 minutes (something Reliance has announced). And once the average time goes up, e-commerce firms may decrease their delivery time.” 

So where would that leave the quick-delivery advantage?

The unmoved
 

While other e-commerce majors are getting into the quick space, Amazon India has made no such announcement yet. The e-commerce giant says it does not see quick commerce as a competition.
 

Harsh Goyal, director, Amazon Grocery India, says they are committed to offering “wide selection, value, convenience, and reliable fast delivery for our customers across 100 per cent of India’s serviceable pin codes”.
 

“Today, our [Amazon] Prime members get free, unlimited, same-day delivery across one million products, and next-day delivery across four million products on Amazon.in,” he says. “We believe that our offerings are well rounded, and it allows us to serve our customer needs – both at scale and with speed.”