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Quick-commerce platforms are transforming FMCG sales, potentially doubling major brands' share and intensifying competition with e-commerce giants.
According to an analysis conducted by Elara Securities, quick-commerce platforms like as Blinkit, Swiggy Instamart, and Zepto are expected to experience a big shift in the retail sector as they are expected to increase by fourfold the amount of sales from large FMCG brands in the near future. At the moment, fast commerce accounts for 7-8% of sales for smaller FMCG brands and 1-2% of sales for larger ones. This growth is attributed to the lower discounting and higher margins these platforms offer compared to traditional e-commerce channels.
The report highlights that while traditional trade remains the most profitable for FMCG brands, quick-commerce is catching up, offering a compelling alternative. For mid-sized brands, quick commerce now accounts for about 40% of digital sales, with projections indicating this could rise to 60% soon. Existing online retailers like DMart and Nykaa are being forced by this change to provide greater discounts in order to remain competitive.
Quick-commerce's development has reshaped the normal retail and e-commerce industries, especially in areas like grocery, personal care, and cosmetics. Due to their inability to match quick-commerce services' speed and convenience, established e-commerce platforms are finding it more difficult to remain profitable in the wake of this disruption.
The research does point out that quick-commerce's current sphere of effect is restricted to tier-1 and metro locations. Expansion into tier-2 and -3 cities could further challenge traditional retail giants and e-commerce platforms, pushing them to innovate faster.
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