Major consumer goods companies like Hindustan Unilever (HUL), Dabur, Adani Wilmar, and Parle Products reported that the contribution of quick commerce to their overall e-commerce sales surged to 35% in FY24, nearly doubling within a year.
Executives stated that quick commerce not only boosted overall e-commerce for these companies but also propelled growth in the broader fast-moving consumer goods (FMCG) industry.
In FY23, quick commerce contributed 15-18% to overall sales.
Since the pandemic, FMCG companies have consistently reported the fastest sales growth from e-commerce, followed by modern trade or grocery retail chains, and then general stores or kiranas. This trend has accelerated in FY24.
This shift has prompted Walmart-backed Flipkart to plan its entry into the quick commerce market.
Continue Exploring: Flipkart challenges Zepto and Blinkit with quick commerce expansion
Parle Products Vice-President Mayank Shah remarked that the pace of change has been surprising, with consumers readily accepting the additional convenience fee. Quick commerce companies like Zepto, Swiggy, Blinkit, and BB Now are encouraged to expand into new markets.
“Even the heavy spending on discounts has decreased somewhat. Time has become a premium for people,” he said.
Social commentator and brand specialist Santosh Desai observed that quick commerce has reached a stage of normalization, with people increasingly avoiding planning their purchases in advance.
“For an increasing number of consumers, the convenience fee for quick commerce is much lower than the hassle of planning a shopping trip or ordering in advance,” he said. “It’s a new value equation in their lives.”
Zomato announced in its earnings release on Monday that it is swiftly expanding its Blinkit quick commerce business, targeting 1,000 dark stores (warehouses from which goods are shipped to consumers) by March 2025, up from 526 as of the March quarter.
Continue Exploring: Blinkit’s Q4 FY24 revenue hits INR 769 Crore; loss narrows to INR 37 Crore
It was mentioned that while Blinkit currently operates in 26 cities, the expansion efforts are primarily concentrated on the top eight cities, including Bengaluru, Mumbai, and Hyderabad.
Earlier this month, Dabur India’s Chief Executive, Mohit Malhotra, informed analysts that quick commerce is contributing approximately 30% to the company’s e-commerce business.
“And we aim to collaborate with Swiggy, Zomato (Blinkit), Zepto — as they continue to expand into various urban areas across India. This presents a significant opportunity,” he said.
The sales growth via e-commerce for FMCG companies has been two to three times greater than that of modern trade.
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As an example, Tata Consumer Products experienced a 35% growth in e-commerce sales, in contrast to a 9% increase in modern trade. While the contribution of modern trade to overall sales remained stagnant at 14% for the company, the contribution of e-commerce rose from 9% in FY23 to 11% in FY24.
Angshu Mallick, the managing director of Adani Wilmar, emphasized that quick commerce is fueling the growth of the overall e-commerce segment for FMCG. “In fact, there are consumers now placing orders every half an hour. Our top-selling items in quick commerce include packs of mustard oil, sunflower oil, and atta,” he noted.
In its most recent investor presentation, Nestlé reported that the contribution of e-commerce to domestic sales has increased fivefold over the last five years — from 1.3% in 2018 to 6.8% as of March 2024 — propelled by “significant growth in quick commerce.”
Besides quick commerce, Jawa noted that even beauty commerce and marketplaces are expanding for HUL within the overall e-commerce sector.
Continue Exploring: Quick commerce platforms Blinkit and Zepto expand into e-commerce, targeting fashion, beauty, electronics, and more
