Over the past few years, quick commerce has taken off like a rocket ship all over urban India. This blitz is powered by companies such as Swiggy, Zepto, and Blinkit. A recent survey conducted by consultancy firm PwC found that 42% of urban consumers in major metropolitan areas prefer on-demand, rapid delivery services. Their needs are immediate and urgent, so they turn to these quick alternatives. Shopping habits are quickly evolving. This change has been a cause of concern for longstanding corner shops and independent retailers, who are facing falling sales and an uptick in shop loss.
Rapid delivery has thrived largely because of consumer density within city hubs. It’s become the new normal for millions of people in cities to opt for grocery delivery straight into their homes within minutes. Many small retailers are already feeling the dire effects. In fact, three in ten retailers say they’ve experienced an adverse effect on their business due to this trend. It’s a crushing reality that so many are living under.
The impact of quick commerce has been especially acute on the sales of staple goods. Retailers have suffered a shocking 52% drop in these sales. That sudden impact has caused the permanent loss of hundreds of thousands of mom-and-pop stores nationwide. Trade industries that represent small businesses predict some 200,000 small retailers have closed over the past year – just this, one year! In Chennai, a municipal body reported that 20% of small grocers and 30% of larger departmental stores had closed in the last five years.
According to analysts, the rapid delivery industry will continue its upward growth. They project it to continue growing at an annualized rate of more than 40% through 2030, thanks largely to continued geographic expansion. Trade organizations such as the Confederation of All India Traders and the All India Consumer Products Distributors Federation are raising dulled warning bells. What they favor is a proposal that would quickly, urgently spur the government to stop the unchecked growth of these big, faster-growing companies.
Worries about these anti-competitive practices have bubbled up to the surface. Quick commerce firms have been recently criticized for using billions in venture capital funding to predatory pricing and deep discounts. One of the companies’ sources defended the practice. They clarified that the discounting was executed by traders on their platform, not the company itself.
From the outset, we have heard from numerous small retailers who’ve felt blindsided by the rapid changes in the landscape. Sunil Kenia, a local shop owner, remarked, “It started going downhill after the Covid lockdowns. Business is at 50% of what we did before the pandemic.” Unfortunately, these sentiments are part of a scary pattern among legacy retailers who have not been able to keep pace with the changing times.
Consumer convenience goes a long way to explaining the allure of quick commerce. Monisha Sathe, a city resident, noted, “Lugging groceries back home was a big pain.” To those of us who live in cities, hacks like this are all too familiar. They often balance hectic schedules and require seamless solutions for their shopping. A source from within one of the quick commerce companies added further insight, stating, “Think of women or senior citizens – they don’t want to be harassed or navigate potholes and traffic.”
Though quick commerce has expanded rapidly, its reach is still limited to at most a handful of metropolitan areas. Analysts suggest that while these companies currently dominate major cities, India’s diverse landscape means that various retail models will coexist. The country has an impressive degree of income disparity, infrastructure deficit, and stages of development. This diversity will need to be paired with an equal diversity of retail approaches.
Curiously, online shopping makes up just 4% of all retail sales in India today, even with the boom happening in e-commerce. This statistic is a blatant pointer that traditional retail is alive and kicking. It’s a hopeful narrative about how the physical and the virtual worlds can transform in tandem.