Quick Commerce Market Analysis: Key Insights and Market Implications

Market Overview

• Quick commerce is a rapidly growing sub-class of e-commerce with a current market size of $3.5 billion.
• Projected to grow at an over 40% CAGR, reaching nearly $9 billion by 2028.
• Driven by rising shopping frequency and shorter wait times post-orders.

Consumer Behavior

• Loyal quick commerce consumers shop 10-12 times a month, primarily purchasing groceries, with gradual growth in beauty & personal care, household care, kitchen appliances, and gifting items.
• Targeted purchases dominate: 40% of searches on quick commerce platforms are direct product searches vs. 60% category exploration, sharply different from e-commerce platforms.

Competitive Landscape

• Brands are rushing to onboard onto quick commerce platforms due to the appeal of higher inventory turnover.
• Quick commerce platforms (~3,500 sqft) are selective in onboarding brands compared to modern trade channels (~40,000 sqft).
• Balancing a mix of consumer-ordered labels (established giants) and smaller new-age brands is critical for quick commerce platforms.

Non-Metro Market Dynamics

• Non-metro markets show non-linear performance due to uncertainties in unit economics, product assortment, and throughput per store.
• Kirana stores remain relevant in tier II/III areas due to:
  • Credit period features (more relevant in smaller cities).
  • Fewer working professionals per household.
  • Higher volumes of low-sachet products, which negatively impact quick commerce’s average order value.

FMCG Dominance and GMV

• FMCG products dominate 80% of sales on quick commerce platforms, with even higher penetration (over 90%) in smaller cities.
• Quick commerce platforms are expanding into other product categories to boost average order values.

Kirana Store Competition

• Large Kirana stores have accelerated home delivery services, potentially increasing competition for quick commerce platforms.
• Margin pecking order: Kirana > Modern Trade > Quick Commerce.

Future Outlook

• Quick commerce is poised for sustained growth, with strategic considerations around brand mix, category expansion, and non-metro market penetration.
• Regulatory impacts and long-term effects on supply chain efficiency, consumer behavior, and competition with traditional retail channels will shape the sector’s evolution.