Quick Commerce

Quick Commerce Platforms like Blinkit, Zepto, Zomato, and Swiggy have agreed to discontinue their 10-minute delivery promise after the intervention from Union Labour Ministry.

•  This decision aims to prioritize safety, security, and improved working conditions for gig workers, who are often under pressure to meet tight deadlines

What is Quick Commerce?

• Quick Commerce (Q-Commerce) refers to the instantaneous or rapid delivery of goods and services, typically within an hour or less. 
• It is a modern development in the e-commerce sector, focused on speed and convenience, making products available to consumers almost immediately after ordering.

How Quick Commerce Functions

• Rapid Delivery System: Q-Commerce ensures ultra-fast delivery of goods, typically within an hour or less. 
  • This rapid delivery is made possible by utilizing a network of dark stores and distribution centers strategically located near urban areas.
  • Data-Driven Customization: Unlike traditional retail, Q-commerce platforms heavily rely on data analytics to enhance customer experience and operational efficiency.

Status of Quick Commerce in India

• Market Size:  It is expected to grow rapidly, projected to reach $9.95 billion by 2029, growing at an impressive 76% year-on-year.
• Consumer Base: Q-commerce primarily serves urban households, focusing on metro and Tier 1 cities. There are 20 million addressable households in these regions, which constitutes the core consumer base for quick commerce services.
• NITI Aayog’s “India’s Booming Gig and Platform Economy” report:
  • The study estimates that in 2020- 21, 77 lakh (7.7 million) workers were engaged in the gig economy.
  • The gig workforce is expected to expand to 2.35 crore (23.5 million) workers by 2029-30.
  • At present about 47% of the gig work is in medium skilled jobs, about 22% in high skilled, and about 31% in low skilled jobs.

Benefits of Quick Commerce

• 24/7 Operations: Q-commerce operates round-the-clock, enabling customers to place orders and receive deliveries at any time of the day or night.
• Reduced Role of Middlemen: Direct supply chains between suppliers and consumers reduce the need for intermediaries, streamlining the process and enhancing efficiency.
• Improved Marketing and Supply Chain Management: With hyper-local sourcing, Q-commerce enhances supply chain management by sourcing goods from nearby locations, ensuring faster delivery and better inventory control

Government Initiatives for Quick Commerce Growth in India

• 100% FDI in B2B Models: The Indian government allows 100% Foreign Direct Investment (FDI) through the automatic route in Business-to-Business (B2B) entities, which has opened the door for foreign players to invest in India’s fast-growing quick commerce sector.
• BharatNet: A national broadband initiative, aims to improve broadband access in underserved and rural regions. 
  • By extending connectivity to remote areas, BharatNet plays a crucial role in facilitating the growth and expansion of quick commerce services, enabling more widespread access to digital platforms and delivery services
• Open Network for Digital Commerce (ONDC):  A government initiative under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce promoting fair competition and democratizes digital commerce by onboarding smaller vendors onto digital platforms.
• Unified Payments Interface (UPI) & RuPay: India’s UPI and RuPay platforms have significantly simplified payment processes, offering seamless banking services and facilitating smoother, more efficient transactions in quick commerce.

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Initiatives for Gig Workers

• Code on Social Security, 2020: The Code provides a framework for ensuring social security benefits for gig workers, including health and insurance coverage.
• Code on Wages, 2019: It ensures fair wages and a minimum standard of pay for gig workers.
• e-Shram Portal: A digital platform for registering informal and gig workers to provide them with social security and welfare benefits.

Challenges Posed by Quick Commerce

• Worker Exploitation & Delivery Rider Risks: The promises of ultra-fast deliveries, such as 10-minute delivery guarantees, raise significant ethical concerns related to the safety of delivery partners.
• Threat to Traditional Retail: Millions of Kirana stores and local distributors face closures or severe losses due to the aggressive strategies of quick commerce platforms.
• Anti-Competitive Practices: Quick commerce platforms face accusations of predatory pricing and deep discounting, which are viewed as tactics to eliminate competition.
• Algorithmic Price Manipulation: Q-commerce platforms are also accused of using customer data (such as location, device type, and purchasing behavior) to implement differential pricing.
• Instant Gratification: The growing demographic preference for instant gratification has led to frequent and impulsive purchasing.
  • Websites use cookies to track purchasing behavior, targeting customers’ psychology and encouraging them to make more purchases, further fueling this demand for instant delivery
  • Environmental Impact: The quick commerce sector has a significant environmental impact, contributing to rising carbon emissions and packaging waste due to unsustainable practices
• Fast deliveries rely heavily on motorbikes and single-use plastic packaging, adding to the environmental burden.

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