Around 33% of iD Fresh Food‘s sales originate from quick commerce platforms, while its traditional e-commerce sales have experienced a 25% decline over the past two years, as reported by Moneycontrol.
Sales through quick commerce channels have witnessed a remarkable surge, skyrocketing by over 100 times. According to the report, the company, which earned nearly INR 500 crore in FY23, generated INR 17 crore monthly from quick commerce in the first three months of 2024. This is a substantial increase from INR 15 lakh per month, recorded two years ago.
The report highlighted that the convenience of quick commerce has shifted household habits, diminishing the necessity for planning meals a day in advance, as everything is now accessible within just 30 minutes.
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PC Musthafa, the Founder and CEO of iD Fresh Food, pointed out that the expansion of quick commerce hasn’t suppressed offline sales, which continue to be the main revenue source. Nevertheless, he stressed the growing importance of convenience and predictability to customers, underscoring the trend towards quick commerce compared to scheduled delivery models.
Among iD’s leading quick commerce platforms are Swiggy Instamart, Zepto, Blinkit, and BB Now. Musthafa noted that while Bigbasket has been surpassed by others, this change reflects consumer inclination towards quick commerce. However, Bigbasket retains its strength in scheduled deliveries, especially for long shelf-life FMCG products.
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Despite critics questioning the financial viability of quick commerce models, Musthafa remains confident in their potential profitability. He points to uniform margins across platforms and advanced technological infrastructure as evidence of this potential.
He emphasised that quick commerce has provided a performance marketing model that enables precise measurement of advertising effectiveness, in contrast to traditional advertising mediums like streaming platforms, tv, or newspapers, where calculating the impact of spending is difficult.
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Quick commerce allows for the immediate measurement of the outcome of every rupee spent on advertisements. According to Moneycontrol, iD usually targets a return on investment ranging from 1x to 3x. Through daily reports from quick commerce platforms, they quickly determine the sales generated from banner ads. This direct customer interaction facilitates efficient conversion, offering substantial opportunities for brands.
The swift rise of quick commerce is evident, with contenders like Blinkit and Zepto emerging as leaders in this unique market landscape. Flipkart‘s recent venture into this realm indicates further growth, heightening competition with established players such as Blinkit, Zepto, Instamart, and BigBasket.
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According to data analysis conducted by BofA Global Research using Sensor Tower, these platforms have shown substantial growth in daily and monthly active users. From February 2023 to February 2024, Blinkit observed a 58% surge in its daily active user (DAU) base, while Zepto experienced even more rapid growth at 86% during the same period, and it’s noteworthy for its low delivery rates. Meanwhile, BB Now, associated with BigBasket, saw a growth of 14%.
Likewise, regarding monthly active users (MAU), Blinkit witnessed a 64% increase, Zepto surged by 93%, and BB Now saw an 18% rise.
Despite Zepto’s rapid growth, Blinkit maintains a substantial lead in subscriber numbers. As of February 2024, Blinkit boasted around 23-24 million MAU, surpassing Zepto’s 16-17 million, with a gap of over 7 million users.
In February 2024, BB Now, with a monthly active user base ranging between 9 million and 11 million, enhanced its delivery system to ‘supersaver’ in 40 cities, guaranteeing delivery within two hours.
Furthermore, Blinkit has effectively guided customers towards higher average order values, boasting an average of INR 635, surpassing its closest competitor by INR 185, as reported by BofA Research.
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