Why in news?

Quick commerce emerged during the COVID-19 lockdown to serve customers but has since evolved to reshape urban shopping habits.

What’s in today’s article?

• Quick commerce, or Q-commerce
• Benefits of Quick Commerce for Brands
• Impact on Traditional Retailers
• Challenges Faced by the Quick Commerce Industry
• Regulations and Transparency in Quick Commerce
• The Fast Future of Q-commerce

Quick commerce, or Q-commerce

• Quick commerce, or Q-commerce, is a type of e-commerce that delivers orders in a very short time, often within an hour. It's also known as "on-demand delivery".
• How Quick Commerce Functions
  • Rapid Delivery System
    • Q-commerce ensures ultra-fast delivery (10–20 minutes) by leveraging a network of dark stores and distribution centers.
    • These warehouses, dedicated solely to online orders, are strategically placed near consumers to enable faster deliveries.
  • Data-Driven Customization
    • Unlike traditional retail, Q-commerce platforms use mobile apps to collect and analyze customer data.
    • This feedback loop helps in personalizing the shopping experience, optimizing inventory management, and predicting product demand based on seasonal trends or demographic shifts.
• Some Q-commerce companies in India
  • Blinkit, Zepto, Swiggy InstaMart, BigBasket Now, Flipkart Minutes, Dunzo Daily, Amazon Fresh, and M-Now (Myntra).

Benefits of Quick Commerce for Brands

• Enhanced Brand Awareness
  • Quick commerce helps retailers increase brand visibility due to its widespread adoption and growing consumer base.
• Availability of Low-Cost Workforce
  • The sector benefits from an easily employable workforce, particularly from specific age and economic groups, improving operational efficiency.
• Supply-Side Advantages
  • Q-commerce platforms offer cost-effective distribution, eliminating the need for individual brands to invest in expensive storage solutions, such as freezers for chilled products.
• Rapid Market Growth
  • The Indian quick commerce market, currently valued at $3.34 billion, is projected to reach $9.95 billion by 2029, growing at a rate of 76% YoY in FY 2024.

Impact on Traditional Retailers

• Allegations of Anti-Competitive Practices
  • Various organizations have accused quick commerce platforms (Blinkit, Zepto, and Swiggy Instamart) of engaging in anti-competitive behavior.
• Predatory Pricing and Deep Discounting
  • Platforms allegedly set product prices below cost to drive out competitors and later increase prices to recover losses.
  • Their access to venture capital and foreign investments gives them an unfair advantage.
• Concerns Over Differential Pricing
  • Quick commerce platforms are accused of using customer data to adjust prices based on location, device type, and shopping behavior, further disadvantaging traditional retailers.
• Threat to Small Retailers
  • Traditional retailers struggle to compete, leading to the closure or financial distress of millions of small shops and distributors.
• Call for a Level Playing Field
  • Industry representatives emphasize the need for fair competition where both quick commerce platforms and traditional retailers can coexist.

Challenges Faced by the Quick Commerce Industry

• Slowdown in Growth
  • The hypergrowth of quick commerce is slowing as investors shift focus post-pandemic.
  • Companies all over the world are downsizing due to reduced capital investment.
• Traffic and Safety Concerns
  • Urban congestion and safety risks pose challenges. In cities like New York, authorities are considering banning 15-minute deliveries to prevent reckless driving.

Regulations and Transparency in Quick Commerce

• Government Regulations: India’s 2023 guidelines prohibit deceptive practices by platforms, advertisers, and sellers, aiming to curb dark patterns.
• Challenges in Enforcement: Despite regulations, enforcement remains difficult, and new deceptive tactics continue to emerge.
• Need for Transparency: As quick commerce expands, clear pricing, honest advertising, and user-centric designs are essential to ensure fairness.
• The Hidden Cost: Without proper regulation, the convenience of rapid deliveries may come at the expense of consumer rights and ethical business practices.

The Fast Future of Q-commerce

• The COVID-19 pandemic changed consumer shopping habits, with many still preferring online shopping for convenience.
• While quick commerce accelerated during the pandemic, it was already gaining traction before.
• Digital natives now expect instant delivery, making quick commerce a permanent part of eCommerce.
• With advancing technology, more eCommerce brands will adopt quick commerce, offering deliveries in minutes.