India's Quick Commerce Boom: Competitive Clashes Fueling Future Growth

Quick commerce in India is undergoing a transformative phase, with Bernstein Research forecasting it will remain fiercely competitive. The sector is seen as particularly appealing to approximately 70 million affluent, yet time-pressed, urban users who value convenience. Bernstein projects that by FY30, this market will swell to a USD 35 billion valuation.

This rapid growth comes at the expense of traditional mom-and-pop shops, especially within the nation's top 40 cities. Nevertheless, traditional retail is expected to continue its upward trajectory, addressing different consumer needs. Critical factors for success in quick commerce include strategic store positioning, robust consumer data, and operational excellence, providing market leaders a competitive edge.

The report challenges the perception that quick commerce will result in a 'winner-takes-all' scenario, unlike network-effect platforms. Although leading companies profit more efficiently, industry-wide profit sharing lacks the concentration seen in food delivery. Blinkit, Instamart, and Zepto are the anticipated market dominators, remaining profitable amid stiff competition.

Food delivery, termed the 'cash machine' of online commerce, shows slowed growth rates, aligning with the end of a demand shift from offline to online. Looking toward sustainability, quick commerce and food delivery firms are advised to innovate by offering shorter delivery times and healthier choices, although margins may remain limited.

Targeting the top 5% of Indian consumers with high purchasing power, valued at USD 80 billion by FY30, could reshape business models. Companies might need to diversify into dining, events, and entertainment to fully capitalize on their clientele, tapping into diverse revenue streams through innovation and investment.