Why Quick Commerce in India is Miles Ahead
👋 Introduction
In India, you can get a packet of chips delivered in 10 minutes for the price of a metro ticket. Why does this seem impossible in the United States?
Just yesterday, on a regular weekday evening, juggling fatigue and a growling stomach, the idea of making a trip to the store or cooking felt overwhelming. So, in classic modern-day fashion, I reached for my phone and fired up my quick-commerce app.
One search, two clicks, and ten minutes later, someone was at my door with a bag of chips and Diet Coke. I marveled at how living in a metropolitan area in India means experiencing the peak of convenience — and how utterly spoiled I’ve become. During my time in Canada in 2022, I felt completely out of my element, having to do everything myself. Grocery shopping was an enormous task, whereas, in India, it’s just a 10-minute affair. The fastest grocery delivery available there was same-day or next-day service. This stark contrast made me wonder: why has India embraced convenience and quick commerce so thoroughly, while the West seems to lag? In this blog, I plan to uncover that.
❓ But… what is even quick commerce?
Quick commerce, or q-commerce, is transforming the delivery industry with ultra-fast deliveries, typically within 10–30 minutes. This service is a game-changer for urban consumers, offering quick access to everyday essentials like groceries and snacks. Unlike traditional e-commerce or same-day delivery, q-commerce uses dark stores or micro-fulfillment centers placed strategically in cities, allowing for lightning-fast delivery times.
In India, leading q-commerce companies include Blinkit, Instamart, and Zepto. Meanwhile, in the US, companies like GoPuff, Gorillas, and Getir are making their mark with unique approaches to ultra-fast deliveries.
📜 A Brief History of Q-Commerce
COVID-19 significantly accelerated the growth of q-commerce in India. With strict lockdowns, social distancing, and restrictions on stepping out, people turned to online delivery platforms. Before 2012, most relied on local kirana stores; between 2012 and 2019, grocery and online delivery services gained traction. By 2019, quick commerce emerged, offering even faster and more convenient solutions.
What started as grocery delivery platforms have evolved into apps catering to a wide range of needs. Today, you can order anything from a PS5 or the latest iPhone to snacks, beverages, toiletries, cleaning supplies, missing recipe ingredients, or even basic medicines. These platforms have become the go-to for immediate, unplanned purchases, serving urban consumers who prioritize convenience and speed over traditional shopping.
Initially, the focus was on delivering quality groceries to your doorstep, eliminating the need for market visits. Now, these apps compete on speed, aiming to address unmet needs quickly. Their advertisements highlight this, perfectly aligning with the fast-paced urban lifestyle where time is a luxury.
🆚 Quick Comparison
📈 Q-Commerce in India
India’s quick commerce sector is experiencing explosive growth. Sales have surged by 280% in just two years, with major players like Blinkit, Instamart, and Zepto now reaching 25 million households. The average monthly spend per household is ₹4,000–5,000 ($48–60).
The market is maturing rapidly. Companies are expanding beyond basic groceries to high-value items like iPhones and gold coins. Blinkit alone operates 526 dark stores and plans to double this number by FY25, with their warehouse space growing 28% year-over-year.
▶️ Q-Commerce in USA
While, India’s quick commerce market is on fire, expanding at a breakneck pace, the US quick commerce market seems to struggle. In 2023, Gopuff brought in $1.2 billion in revenue, commanding over 70% of the U.S. quick commerce market. Yet, the numbers tell a more complicated story — a 20% revenue drop from the previous year reflects the uphill battle facing the industry. The U.S. has become a cautionary tale, with major players like Fridge No More, Buyk, Jokr, and Getir folding under intense financial pressures. Despite having higher revenue and more users than India, the U.S. market’s slower growth, marked by a lower compound annual growth rate (CAGR), raises questions about its long-term potential.
But Why the Quick Commotion? 🤔
🏙️ City Buzz, Dense Population and Infrastructure
India
India’s dense population is a key factor behind the success of quick commerce. In urban areas where customers live close together, platforms can optimize delivery routes and achieve delivery times of under 30 minutes. The high concentration of customers also makes operations more cost-effective, driving growth further.
Dark stores play a central role in this model. These small, private warehouses stock a wide range of products and enable rapid order fulfillment. Their adoption has fueled the expansion of quick commerce beyond tier-1 cities into tier-2 and tier-3 markets.
Companies like Blinkit and Zepto have leveraged dark stores to meet increasing demand. Blinkit, for example, expanded its network from 377 dark stores in 2023 to 526 in 2024 and plans to reach 1,000 by 2025.
USA
The USA has a much lower population density compared to India, making quick commerce less economically viable. In the USA, people live farther apart, increasing delivery costs and reducing efficiency. For comparison:
- Mumbai
- Population Density: ~73,000 people per square kilometer (~189,000 per square mile). - New York City
- Population Density: ~26,403 people per square kilometer (~68,000 per square mile).
Mumbai’s population density is almost 3x that of New York City. This higher density allows for more cost-effective dark stores, which are essential for quick commerce. In the USA, higher rents and operational costs further limit the number of dark stores, making the model less practical.
🛵 Low Labor Costs and Gig Economy Growth
India
Affordable labor is a cornerstone of quick commerce in India. Around 700,000 to 1 million delivery drivers work for platforms like Zomato and Swiggy, with numbers fluctuating based on seasonal demand. These drivers typically earn ₹15,000 to ₹25,000 per month, influenced by incentives, order volumes, and peak-hour surcharges.
Many individuals turn to gig economy jobs due to the limited availability of stable, well-paying jobs in the formal sector. Delivery driving offers a flexible way to earn, meet financial needs, and gain quick pay with minimal barriers to entry. This, coupled with rapid urbanization and high demand for quick commerce, makes the gig economy an essential source of livelihood.
India’s lower labor costs allow companies to maintain competitive pricing and fast delivery times. Combined with dense urban populations and high order volumes, this creates a scalable and profitable business model.
USA
In 2024, the number of quick commerce delivery drivers in the USA is estimated at 50,000 to 70,000, with demand fluctuating as companies expand.
Delivery drivers in the USA earn an average of $19.50 per hour, with additional tips boosting their income. While their earnings seem higher than their Indian counterparts, the higher cost of living in the USA balances out purchasing power.
⏱ “I don’t have the time for it…”
India
Millennials and Gen Z love quick commerce for its convenience, especially for last-minute needs. Their fast-paced lives lead to small, quick orders, like getting ginger delivered in minutes for making chai.
In urban India, where convenience is king, these generations are willing to pay more for speedy deliveries. Quick commerce fits their lifestyle, much like kirana stores have for decades. With smaller kitchens and a preference for fresh food, frequent, fast orders are the norm.
Dark stores in high-density areas enable quick commerce to thrive, stocking up to 6,000 SKUs and replenishing multiple times a day. This efficient model ensures a wide range of products is always available and often at prices 10–15% cheaper than traditional stores.
USA
In the U.S., grocery shopping often involves planning and bulk purchases from stores like Costco and Walmart, which saves time and money, especially with rising living costs. Fewer SKUs in American kitchens make bulk buying practical.
Growing online grocery services might disrupt traditional urban lifestyles, where quick trips to local stores and deli interactions are common. Weekly grocery planning is typical, with less emphasis on impulse buying for essentials.
Quick commerce still serves last-minute needs and busy schedules, catering to professionals, parents, and those who prefer fast deliveries. Gen Z and Millennials are the primary users in the U.S.
💸 Inflation Invasion
USA
After the pandemic, US inflation surged, peaking at 9% in June 2022 due to factors like federal stimulus spending and supply chain disruptions. This led to significantly higher prices for everyday essentials, straining consumers’ budgets. High FD rates and Treasury bond yields made borrowing more expensive, further squeezing household finances. As a result, FMCG goods became much more expensive, and consumers were reluctant to spend on delivery services.
India
In contrast, India’s inflation rate remained more stable due to effective monetary policy and supply management. The Reserve Bank of India (RBI) kept inflation within target ranges, and higher FD rates offered better returns to consumers. This stability allowed Indian consumers to continue spending on essentials and easily afford delivery services.
📊 Crunching the Numbers: Unit Economics
We’ve discussed the factors driving the success of quick commerce in India and the challenges it faces in the US. Now, let’s analyze the unit economics to assess its feasibility. Assuming operations in Mumbai and New York with 1,400 daily orders, and considering the costs outlined below as the operating expenses for a single dark store, let’s dive deeper.
Ratio of AOV/Total Cost per Delivery:
- India:
- Average Order Value (AOV): ₹600 (Blinkit)
- Cost per Delivery: ₹72 - USA:
- Average Order Value (AOV): ₹8000 (Instacart)
- Cost per Delivery: 2118
The AOV in the US needs to reach ₹14000 to match India’s efficiency. Currently, it stands at ₹8000 (Instacart).
🎯 Final Verdict
India is doing well but still behind countries like China. In 2023, China’s quick commerce market was worth $93 billion, growing 28.89%, while India’s market is expected to reach $5.5 billion by 2025. The difference comes from market maturity, urbanization, and adoption. India has huge growth potential, with players like Flipkart and Amazon expanding into quick commerce.
For example, Flipkart is entering the quick commerce market, and Zomato’s Blinkit is striving for dominance. Established players feel the pressure, with Dmart’s shares dropping in response to rising competition. Mukesh Ambani, India’s wealthiest man, is even piloting sub-30-minute deliveries, despite shutting down a similar service before.
But let’s be real — it’s not all smooth sailing. Riders are risking their lives, working under tough conditions, and earning below minimum wage. Traffic accidents are on the rise, and the reality is that while quick commerce is booming, it needs to be handled with a lot more care. The industry has huge potential, but it won’t get far if it ignores the people powering it.
References
- https://economictimes.indiatimes.com//industry/services/retail/quick-commerce-sale-in-india-surge-by-280-per-cent-over-two-years-report/articleshow/113760320.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
- https://techcrunch.com/2024/03/11/zomato-blinkit-sprints-to-quick-commerce-dominance-in-india/?guccounter=2
- https://www.business-standard.com/industry/news/quick-commerce-dark-stores-poised-to-boost-india-s-real-estate-demand-124102900826_1.html
- https://www.nytimes.com/2021/11/09/nyregion/online-grocery-delivery-nyc.html
- https://www.latimes.com/business/story/2022-07-12/delivery-startup-gopuff-cuts-10-of-staff-closes-warehouses-to-preserve-cash
- https://www.bloomberg.com/news/articles/2022-03-17/russia-backed-delivery-app-buyk-files-for-bankruptcy-in-n-y?sref=6UP70zYf
- https://techcrunch.com/2024/04/29/getir-getout-instant-delivery/
- https://finance.yahoo.com/news/quick-commerce-failure-symptom-demand-121707829.html
