Quick Commerce Disrupting Traditional Retail
Quick commerce, a new-age delivery model emphasizing ultra-fast deliveries, is significantly changing the retail landscape. While large e-commerce platforms remain relatively unaffected, Rapid Retail has posed challenges for kirana stores, or traditional neighborhood shops, especially in the grocery delivery sector.
\According to a report by Datum Intelligence, Hyperlocal Delivery could seize over $1 billion in sales from kirana stores in 2024. This shift highlights the growing influence of platforms like Blinkit, Instamart, and Zepto in India’s retail ecosystem.
How Instant Delivery Affects Kirana Sales
Sahil Barua, CEO of Delhivery, stated that quick commerce is eating into kirana sales more than it impacts e-commerce giants. Speaking at Delhivery’s quarterly earnings call, Barua emphasized how the model directly competes with kiranas by offering fast delivery for essential items.
“The reality is that quick commerce is reshaping the retail dynamics more for kiranas than the broader e-commerce ecosystem,” said Barua. He explained that the focus on different SKUs (stock keeping units) distinguishes quick commerce from traditional e-commerce.
Quick Commerce Adapts with Larger Warehouses
To meet rising consumer demands, quick commerce companies are innovating rapidly. Platforms like Blinkit have begun offering up to 25,000 unique SKUs, expanding into categories such as toys, home furnishing, and fashion. By shifting from 15-minute deliveries to broader four-hour timeframes, they are setting up larger warehouses, almost mirroring Amazon’s fulfillment centers.
Barua noted, “Rapid Delivery Platforms are essentially re-engineering their logistics to handle an expanded range of SKUs, making their operations resemble traditional e-commerce setups.”
Counter Perspectives on Quick Commerce
However, not everyone agrees with this narrative. Zomato CEO Deepinder Goyal believes Instant Delivery does not significantly impact kiranas or large players like DMart. Instead, it competes with companies like Amazon and Flipkart while encouraging increased consumption in urban areas.
“Blinkit is not eating into kiranas. We’re more likely reducing Amazon and Flipkart’s market share,” said Goyal at the Economic Times Startup Awards 2024.
Delhivery’s Expansion Plans
Delhivery, a leading logistics company, is stepping into the on-demand delivery sector with new intracity logistics services. The company plans to offer shared warehouses and ensure quick dispatches within 1-2 hours.
Barua highlighted that Delhivery’s focus will remain on solving logistics problems for brands. The pilot project, starting in Bengaluru with a beauty and personal care company, aims to provide tailored solutions for quick commerce logistics without targeting low-average-order-value segments like food and cigarettes.
Conclusion
Quick commerce is undeniably transforming retail, particularly for kiranas. With expanding SKUs, faster deliveries, and new logistics strategies, it is carving a unique niche. Yet, its exact impact on traditional and modern retail channels will continue to spark debate within the industry. Transitioning to this evolving model requires adaptability and innovation, signaling a dynamic future for Rapid Retail.
