Rise of Quick Commerce in India

The rise of quick commerce in India is reshaping the e-commerce sector, with new platforms and innovations transforming consumer behavior. Despite facing scrutiny and regulatory challenges, quick commerce platforms like Zepto, Blinkit, and Dunzo have rapidly expanded their footprint, catering to the demand for ultra-fast delivery services. As India’s e-commerce market grows exponentially, the rise of quick commerce in India presents both opportunities and challenges.

The rise of quick commerce in India has marked a paradigm shift in the e-commerce landscape, propelling the country’s retail sector into a new era of rapid deliveries and instant gratification.

Traditionally, e-commerce in India was dominated by platforms such as Amazon and Flipkart, which offered a wide variety of goods with delivery times ranging from a few days to a week.

However, with the rise of quick commerce platforms, consumers are now able to get essential items delivered within minutes, often 10 to 30 minutes, reshaping consumer expectations.

Quick commerce is not merely an evolution of traditional e-commerce; it represents a disruption in the retail ecosystem. It caters to the fast-paced urban lifestyle, where convenience and immediacy are highly valued. As India’s internet penetration expands, especially in urban areas, quick commerce platforms are tapping into an untapped market, offering services ranging from groceries to medicines and personal care items. With the overall e-commerce market in India set to reach $200 billion by 2026, quick commerce is expected to account for a significant share, potentially touching $5.5 billion in the near future.

The rise of quick commerce in India has sparked a debate on its potential and impact. While it has undoubtedly transformed urban retail dynamics, it has also raised concerns among regulators, labor groups, and traditional retailers. As quick commerce platforms expand aggressively, they face scrutiny from government authorities, particularly regarding labor practices, sustainability, and the impact on local businesses.

In this article, we explore the concept of quick commerce, its opportunities, challenges, and the regulatory framework that could shape its future in India.

Quick commerce, or q-commerce, is a disruptive business model that focuses on the ultra-fast delivery of goods, typically within 10 to 30 minutes.

It primarily targets essential items, including groceries, medicines, personal care products, and even cooked food. The rise of quick commerce in India caters to the growing demand for instant gratification, especially among urban consumers who seek convenience and speed in their shopping experiences.

Quick commerce platforms operate by using hyper-local delivery systems, with micro-warehouses or "dark stores" strategically located in proximity to customers. These platforms leverage technology, data analytics, and artificial intelligence to predict consumer demand and optimize delivery routes. By focusing on essential products, quick commerce platforms can offer ultra-fast services without the need for large inventories or complex logistics networks.

Quick Commerce Examples in India

Quick commerce has emerged as a distinct business model in comparison to traditional e-commerce. Here’s a breakdown of the key differences between the two:

The rise of quick commerce in India offers numerous opportunities, ranging from enhanced consumer convenience to employment generation and technological innovation.

• Enhanced Urban Consumer Convenience: The demand for ultra-fast delivery services, especially in urban areas, is fueling the growth of quick commerce platforms. With increasing internet penetration and smartphone usage, urban consumers are turning to platforms like Blinkit, Zepto, and Swiggy Instamart for fast deliveries. Quick commerce has become an essential part of urban life, particularly post-Covid-19 when consumers are seeking the convenience of immediate deliveries.
• Boost to Employment Generation and Gig Economy: The rapid expansion of quick commerce platforms is generating significant employment opportunities, particularly for delivery personnel and micro-warehouse staff. The gig economy is benefiting from the rise of quick commerce, offering flexible earning opportunities to a large section of the workforce. As India’s gig workforce is projected to reach 23.5 million by 2029-30, quick commerce is playing a crucial role in providing flexible and part-time job opportunities.
• Driving Innovation and Technology Adoption: Quick commerce is at the forefront of technological innovation, leveraging AI and machine learning for demand forecasting, inventory management, and optimized delivery routes. Companies are innovating with micro-warehousing models, dark stores, and predictive algorithms to meet consumer demand efficiently. This technological focus aligns with India’s Digital India Mission and is contributing to the growth of the digital economy.
• Expansion into Tier-2 and Tier-3 Cities: While quick commerce platforms are thriving in urban metros, there is immense potential for expansion into Tier-2 and Tier-3 cities. As digital adoption increases in smaller cities, the demand for quick commerce services is also expected to rise. Tier-2 and Tier-3 cities accounted for 60% of India’s overall e-commerce demand in 2023, with strong growth projected in the coming years.
• Supporting Emergency and Essential Deliveries: Quick commerce has proven essential in emergencies, providing rapid delivery of medicines, baby products, and other critical items. During the Covid-19 pandemic, quick commerce platforms played a vital role in ensuring the timely delivery of essential goods. The potential for quick commerce to support emergency situations in the future is substantial, making it a valuable component of India’s retail landscape.
• Contribution to the Startup Ecosystem and Investment Growth: The rise of quick commerce in India is adding momentum to the startup ecosystem. Platforms like Zepto have attracted significant venture capital, with Zepto recently becoming India’s 84th unicorn in 2023. The quick commerce sector has created a high-growth space, positioning India as a hub for innovation and investment in the global retail landscape.
• Driving Export of Quick Commerce Expertise: As quick commerce platforms grow in India, there is potential for Indian companies to export their expertise and business models to other emerging markets, particularly in Southeast Asia and Africa. Companies like Swiggy and Zomato are already exploring expansion opportunities in these regions, contributing to the export of Indian technologies and logistics solutions.

The rise of quick commerce also presents significant challenges. These challenges need to be addressed to ensure the sustainable growth of this sector.

• Worker Exploitation and Unethical Labor Practices: Delivery personnel in the quick commerce sector often face immense pressure to meet delivery targets, compromising their safety and well-being. The gig-based nature of the job, coupled with the lack of labor protections, has led to concerns about worker exploitation. Reports of low pay and unsafe working conditions have sparked debates about the ethics of quick commerce platforms.
• Unsustainability of the Business Model: Quick commerce platforms often rely on discounts, cash burn, and investor funding to fuel their growth, making the business model unsustainable in the long term. Many platforms, including Zepto, have incurred significant losses, burning through large sums of capital. The lack of profitability raises questions about the viability of quick commerce businesses in the future.
• Impact on Local Kirana Stores: The rapid growth of quick commerce platforms is having an adverse impact on local kirana stores. With the convenience of quick delivery and discounts, consumers are shifting their preference toward digital platforms, reducing footfall in neighborhood shops. Local stores, which have traditionally been the backbone of Indian retail, are finding it increasingly difficult to compete with the speed and convenience offered by quick commerce.
• Strain on Urban Infrastructure and Traffic Congestion: Quick commerce platforms are contributing to the strain on urban infrastructure, particularly in terms of traffic congestion. Delivery fleets, especially two-wheelers, contribute to inefficiencies in traffic management, particularly during peak hours. The lack of dedicated delivery lanes further exacerbates the problem, adding to the urban congestion and pollution.
• Environmental Impact of Rapid Deliveries: The rapid delivery model of quick commerce has an environmental cost. The constant use of motorbikes and single-use plastic packaging increases carbon emissions and packaging waste. While some platforms have introduced measures to reduce plastic waste, the sector as a whole lacks a unified effort to adopt sustainable logistics practices.
• Limited Focus on Tier-2 and Tier-3 Cities: Despite the growth of quick commerce in Tier-1 cities, there has been limited expansion into Tier-2 and Tier-3 cities. Factors such as poor digital penetration, lower disposable incomes, and logistical challenges have hindered the growth of quick commerce in smaller cities. As a result, the sector remains concentrated in urban hubs, limiting its reach and growth potential.
• Consumer Protection Concerns: The push for ultra-fast deliveries often leads to compromises in product quality. Consumers have reported receiving incorrect or damaged items, and concerns over hidden delivery fees and inconsistent refund policies have led to a decline in consumer trust. A lack of regulatory oversight on quick commerce operations raises issues of accountability and transparency.

To ensure the sustainable growth of quick commerce, India must adopt regulatory measures that address labor issues, environmental concerns, and consumer protection. Key regulatory actions could include:

• Strengthening Labor Protections for Delivery Personnel: The government must mandate fair wages, insurance, and safety measures for gig workers. Platforms should be required to offer health insurance, accident coverage, and fixed working hours to reduce exploitation and improve working conditions.
• Introducing Delivery Time Standards: To promote road safety and prevent over-burdening delivery personnel, the government could regulate delivery timelines, ensuring they are realistic and do not compromise safety.
• Environmental Standards for Sustainable Logistics: Quick commerce platforms must transition to eco-friendly practices, including using electric vehicles (EVs) and biodegradable packaging materials.
• Creating a Centralized Regulatory Authority for E-Commerce: A National E-Commerce Regulatory Authority should oversee fair practices, resolve disputes, and ensure compliance across the sector, including quick commerce.
• Mandating Data Privacy and Consumer Protection Measures: Strict enforcement of data privacy laws and consumer protection measures is essential to ensure transparency and build consumer trust.
• Supporting Tier-2 and Tier-3 City Penetration: The government should incentivize quick commerce platforms to expand into smaller cities, bridging the gap between urban and rural consumers.
• Promoting Ethical Practices Certification: A certification program for ethical practices in quick commerce and e-commerce should be introduced, rewarding companies that prioritize fair labor practices, sustainability, and consumer satisfaction.

The rise of quick commerce in India has revolutionized the retail landscape, offering convenience and instant gratification to urban consumers. While this model presents immense opportunities for innovation, employment generation, and technological adoption, it also faces significant challenges, including labor exploitation, environmental concerns, and competition with local stores. The government's role in regulating the sector, ensuring fair labor practices, and promoting sustainability will be crucial in shaping the future of quick commerce. By adopting a balanced regulatory approach, India can harness the potential of quick commerce while addressing the issues that threaten its long-term viability.

Which department regulates the e-commerce & quick commerce sectors in India?

• The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry regulates e-commerce.
• The Central Consumer Protection Authority (CCPA) oversees consumer protection under the Consumer Protection Act, 2019.

Which country has the biggest e-commerce market for India?

• The revenue ranking in the e-commerce market is led by China with 1.3 trillion U.S. dollars, while the United States is following with 856.77 billion U.S. dollars.

What are dark patterns & a few examples?

• Dark patterns are deceptive UX/UI practices designed to mislead users into making unintended decisions.
• Examples:
  • Sneak into Basket: Adding extra items in checkout without consent.
  • Confirm Shaming: Guilt-tripping users into agreeing to something.
  • Subscription Trap: Making cancellations difficult.
  • False Urgency: Creating fake scarcity or time pressure.

What is meant by flash sales?

• Flash sales are limited-time online sales offering heavy discounts to create urgency and boost sales.

With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct? (2022)

1. They can sell their own goods in addition to offering their platforms as market-places.
2. The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below:

A. 1 only

B. 2 only

C. Both 1 and 2

D. Neither 1 nor 2