Rise of quick commerce in India: business models And infrastructure requirements

Abstract

The democratisation of mobile internet, increase in e-commerce penetration and omnichannel distribution has led to an expansion of the e-commerce industry. The COVID19 pandemic and the subsequent control measures like lockdowns and social distancing led to disruptions in the e-commerce industry (Mandloi et al., 2021). This has also influenced consumer behaviour and led to an increase in the online purchase of perishables and groceries by customers. A part of the shift can be attributed to the diversion of spending from clothing and lifestyle to household essentials (Nahata, 2022). Further, COVID19 led to an expansion in online grocery purchases by 80% in 2020 to USD 2.66 billion1(Patil et al., 2021, p2). The demand was accompanied by instant delivery expectations, leading to the emergence of the quick commerce business. It is estimated that the industry will grow at a CAGR of 27.9% between FY 2022 and FY 2027 (Pratik and Arora, 2022). Today, many players operate in the quick commerce business. Some are new players like Zepto and Pickily while others are an extension of established players like Swiggy Instamart, Blinkit, Dunzo Daily, Country Delight, and Big Basket Daily among others. These players use different business models based on business dynamics and customer requirements to process orders instantly with efficiency and accuracy. Warehouses are a key element of the quick commerce supply chain.