If you are an ardent follower of the e-commerce industry, you know that quick commerce (Q-commerce) was the natural evolution that was inevitable at one point. But, the timing of the domestic startups to strengthen their quick commerce offerings, couldn’t have been better. With the strike of the pandemic, we have witnessed the significance of quick commerce. Here, we have captured how this emerging trend is growing and the scope that lies ahead of it.

1. India’s consumables market to become $~ 1Tn by 2025

Indian Consumables Market Size & Growth(A), USD Bn, CY 2016 – 2025 F

Consumables market in India is projected to grow sustainably for the next 5 years at ~6% CAGR to hit USD $~1 Trillion by 2025 from $725 billion in CY20. Further, Q- commerce penetration within the online consumables market is ~7% and is expected to grow to 12-13% by 2025. Currently at USD $~3.8 billion, the total online consumables market is expected to grow exponentially and is expected to reach $30+ Bn by 2025, of which ~50% will come from Metro and Tier-1 cities.

2. Metro & Tier 1 cities drive the market on the back of mid-high income households

Notes: Exchange rate: 1 USD = 70 INR

Metro and Tier 1 cities are a major growth driver. Mid to high income households within these cities will drive growth; they are convenience seeking and spend across consumables sub-categories. These consumers include Gen Z, ambitious millennials, Gen X-active buyers and Gen X- Passive buyers. Gen Z- impulse purchasers and ambitious millennials dominate in unplanned purchases and their fulfilment methods are based on speed and convenience.

3. Consumers in Metro and Tier-1 cities make unplanned purchases than the rest of the country

Consumables GMV in Metro & Tier 1 (Top 48 cities) –By Customer use case, In % and $ Bn, CY 2020

Emerging as one of the fastest growing e-commerce models, Q-commerce is serving the need for faster delivery among convenience seeking customers. With high fill-rates and 30-45 mins delivery service for unplanned orders, mid-to high income households in Metros are increasingly replacing traditional kiranas with Q-commerce platforms like Swiggy’s Instamart and Dunzo.

4. Here are the different consumer cohorts for Q-commerce

Key Archetype – Overall Consumables Purchase Behaviour (mid to high income HH)

5. Q-commerce expected to grow 10-15x in the next 5 years

Online Quick Commerce Market GMV and Forecast In CY, For CY2020-2025E, By Scenario

Quick commerce is estimated at USD $~0.3 Bn in CY2021 and is expected to grow 10-15x in the next 5 years, to become $5 billion by 2025. ~20 million households are addressable by quick commerce in India with an estimated addressable market size of USD $~50 Bn in 2020.

It can be said that this market is seeing a high demand and going forward, Q-commerce will become one of the major e-commerce models to cater to the growing needs of the consumers.