Ultra-fast, 10-20 minute deliveries are growing as a percentage of India's ecommerce landscape, but the winners in this segment are not yet clear, says Sumit Keshan, head of Wipro Consumer Care – Ventures.
Picture this – you’re hurriedly pulling out ingredients in the kitchen to make a pasta dish for unexpected guests when you realise you’re out of pasta. Do you pivot and make something else, or dash to the store to grab the missing item?
Or, do you pull out your phone, place an order online and continue with the food prep, easy in the knowledge that the missing item will be delivered in 15 minutes?
That’s quick commerce for you and it has redefined consumer purchase patterns, brand engagement and supply chain operations in India.
“There’s no doubt that quick commerce has been a big change in the market. It’s helped startups gain visibility and get established in a shorter period of time because of how quickly they’re able to reach customers,” says Sumit Keshan, managing partner at Wipro Consumer Care – Ventures, the corporate VC arm of Bengaluru-based FMCG company Wipro Consumer Care and Lighting.
“Of course, you have to have a great product, and consumers need to buy via your platform, but q-com has been a big supporter of the Indian startup ecosystem. A large number of brands that have emerged in the last few years are all into q-com, including ones we’ve invested in, and they’re all doing very well.”
Keshan has headed the team since its launch in 2019. The three-member team invests in consumer startups in India and southeast Asia, preferring to enter around the pre-series A stage. It recently signalled a shift from investing at very early stages to backing companies at a slightly later stage.
“The idea is to invest in companies that are slightly mature because the value-add potential for us is higher. This could be in terms of quality of the conversations and category of issues where we can help the company in its scale-up initiatives.”
WCCV has invested in a number of snack, personal grooming, pet care and supplements companies.
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Defining delivery speeds – traditional, rapid and quick
The e-commerce model in India has seen shifts in consumer preferences following the rise of quick commerce. Consumers want their shopping delivered fast and as per their convenience. It has meant that India’s retail logistics is grappling with three different levels of “fast delivery”.
Traditional e-commerce is the standard model of online retail, with a delivery lead time of 2-3 days, or more, for most orders. It is considered as the baseline offering of large e-commerce platforms, suitable for non-urgent purchases.
Quick commerce (or, q-com) is a specialised, hyper-fast version of traditional e-commerce that focuses on delivering orders to customers in as little as 15-30 minutes. It relies on a dense network of local dark stores, small format stores and kirana stores (mom-and-pop shops) and delivery riders to achieve the time-based promise.
Quick commerce is believed to have entered the Indian consumer market with Blinkit (previously Grofers). Launched in 2013, it initially offered 90-minute grocery deliveries in a bid to simplify the process for consumers.
By 2021, the company had switched over to the ultra-fast delivery model of 10-20 minutes, becoming one of the pioneers in the q-com sector in India and setting the stage for other players like Zepto.
“Blinkit’s turn to profitability meant they had a proven model, which meant other players could enter the space,” says Keshan.
And then there is rapid commerce. “It falls between traditional e-commerce and q-com,” explains Keshan. “It’s delivery in five to six hours and falls between a 10-minute delivery and a tomorrow delivery. This is an emerging space with relatively limited competition at this point.”
Rapid commerce is being explored for categories extending beyond groceries. It offers faster fulfilment without the tight timing involved in quick commerce.
Changing nature of India’s consumer sector
Investor interest in Indian consumer startups has been growing over the past decade.
“VC investors initially used to look at the tech sector because that was where the money was to be made. Investments in the consumer sector started happening post 2012-13 and really picked up 2016 onwards,” says Keshan.
He believes the internet economy was a key driver here. “It meant that a newcomer could easily reach out to a larger consumer base very effectively at a low cost. That has helped a lot of the consumer brands that have emerged in this digital D2C space.”
“Everyone is trying to innovate. But I wonder how many players will really survive the q-com approach.”
Now, however, the battle over speed may determine who ends up owning a majority piece of the pie.
“The share of q-com as a percentage of total commerce is increasing rapidly, and it will continue to increase. What is 5-6% today will probably become 20-25%, and so on. And let’s not forget that general trade and the traditional mom-and-pop stores continue to hold sway in the country. They will continue, but it’s likely their share will get eaten,” says Keshan.
With e-commerce giants like Amazon and Walmart-owned Flipkart also entering the quick commerce space, the market is expected to grow from $6bn now to $100bn in sales by 2035.
“It’s a moving market. Consumers are enjoying it, but it makes it harder to read the future to understand what will or won’t work,” he says.
“Everyone is trying to innovate,” says Keshan. “But I wonder how many players will really survive the q-com approach.”
