The Rise of Quick Commerce in India

Syllabus: GS3/ Economy

Context

Quick commerce , altering India’s retail and last-mile delivery landscape, stands out as a prominent trend in the country’s e-commerce sector.

Quick commerce, a subclass of e-commerce, refers to the rapid delivery of goods, primarily groceries and essential items, within a very short time frame, typically in 10 to 20 minutes.
This model relies on hyperlocal fulfillment centers, dark stores, and robust supply chain management to ensure fast and efficient delivery.
The Indian quick commerce market is presently valued at $3.34 billion and is expected to reach $9.95 billion by 2029.
- The industry grew 76% YoY in FY 2024.

Changing Consumer Behavior: Urban consumers prefer instant gratification and convenience, making quick commerce an attractive option.
Internet Penetration: The widespread use of mobile applications and digital payment systems has accelerated Q-commerce adoption.
Technological Advancements: AI-driven inventory management, data analytics, and last-mile delivery optimization have made quick commerce viable.
Affordable Workforce: Availability of low-cost manpower enhances efficiency.

Urban Convenience: Quick commerce delivers essentials like groceries, medicines, and personal care products within 10-30 minutes.
Employment Growth: Expands the gig economy, projected to reach 23.5 million workers by 2029-30.
Tech & Innovation: AI-powered demand forecasting, route optimization, and micro-warehousing models. Companies like Zepto use machine learning to manage inventory efficiently.
Tier-2 & Tier-3 Expansion: 60% of e-commerce growth is from smaller cities.
Emergency Support: Quick commerce helps in emergency situations, providing fast access to medicines, baby products, and essential goods. For example: recently launched Ambulance by Blinkit.

Digital India has transformed India’s digital infrastructure, increased digital literacy, and promoted e-services.
Start-up India has created a favourable environment to encourage innovation from new-age start-ups.
UPI and RuPay have simplified digital payments, offering seamless banking access.
- BharatNet has expanded broadband connectivity, boosting quick commerce and e-commerce in underserved areas.
Open Network for Digital Commerce (ONDC) has increased the reach of India’s quick commerce and e-commerce ecosystem by onboarding smaller vendors onto digital platforms.
100% FDI is permitted through the automatic route in entities engaging in B2B models to encourage the participation of foreign players.

Gig Economy Issues: Delivery executives face job insecurity, long working hours, and lack of social security benefits.
Anti-Competitive Practices: Predatory pricing and deep discounting to eliminate competitors.
- These platforms have deep pockets because of the inflow from venture capitalists and/or foreign direct investment.
Data Exploitation: Differential pricing based on user data, location, and purchasing behavior.
Impact on Traditional Retailers: Small retailers struggle to compete, leading to business closures and financial losses.
Quality Assurance: The rush to deliver products quickly compromises product quality, packaging, and safety standards.

Fair Employment Practices: Companies should focus on providing better wages, insurance, and incentives for delivery personnel.
Integration of Local Kirana Stores: Strengthening partnerships with local retailers can ensure broader market participation and economic inclusivity.
Technological Upgradation: Leveraging AI, blockchain, and IoT can enhance efficiency while maintaining quality and compliance standards.

Quick commerce is reshaping India’s e-commerce with unmatched convenience.
A balanced, well-regulated approach is needed to address sustainability, labor rights, and environmental concerns, ensuring long-term benefits for all stakeholders.

Source: TH

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