Quick commerce growth cannibalising other retail channels, says Kearney report

Mumbai: Only 6–8% of sales on quick commerce platforms are truly incremental, while most of the channel’s growth comes at the expense of other formats—primarily modern trade and ecommerce, followed by local kiranas, according to a report by Kearney.

This is despite supermarkets and ecommerce platforms offering the steepest discounts to shoppers—typically in the range of 13–18%, compared to 6–9% on quick commerce and 2–5% on kiranas or general trade, said the report exclusively shared with ET.

Industry officials agreed that platforms such as Zepto, Blinkit, and Instamart are generating little in terms of new or additional demand.

“Quick commerce is taking some share from marketplaces, they are taking some share from general trade," said Saugata Gupta, managing director of Marico, maker of Parachute oil and Saffola cooking oil.

To reduce “cannibalistic sales,” the company needs to “ensure that we have a tailor-made portfolio to drive offtake, and not just give price discounting,” he added.

While quick commerce started off as a top-up service for last-minute purchases for groceries and small-ticket items, it is now the fastest-growing sales channel, especially for premium portfolios.

The contribution of quick commerce to ecommerce sales has been doubling every year, although on a small base. It roughly accounts for between 3-6% of sales for most consumer goods firms in the country.


Before the entry of quick commerce companies, only about one-third of shoppers in top metros favoured online platforms for their daily shopping. Today, 87% people in these cities shop online, highlighting a major consumer shift helped by convenience and instant gratification that quick commerce provides, the Kearney report noted.

However, the shift is not consistent across all categories.

“In the initial growth phase, food categories have seen the highest migration, with staples leading adoption—challenging the notion that quick commerce is primarily for top-up purchases," said Siddharth Jain, managing partner at Kearney.

However, the shift in fresh produce is lower—indicating that consumers still prefer to handpick such items, he noted. “Adoption in categories such as personal care and electronics is also lower, likely because of the limited assortment offered by quick commerce platforms in their early stages.”

Kearney expects the quick commerce grocery market to grow threefold between 2024 and 2027, reaching about Rs1.5 lakh crore to Rs 1.7 lakh crore and extending to all towns with a population of 500,000 or more by then.

Consumer companies also expect the segment to continue its growth.

“It's growing because there's a three-cornered fight between the three big players in that space,” Varun Berry, vice-chairman of biscuits major Britannia Industries, told investors. “And I think there are certain categories where it even becomes 30% and 35%.”

The industry is largely controlled by Zepto, Zomato’s Blinkit and Swiggy Instamart even as top ecommerce players including Flipkart and Amazon have entered the segment.

Last week, Coca-Cola global chief operating officer Henrique Braun said India has accelerated tremendously in digitisation. “One of the things that was, to me, an eye opener as well, in terms of another channel that's developing here is the quick commerce that is very unique to India. It’s accelerating… Every time I come in, it's bigger,” he said.

Earlier this year, Unilever global CEO Fernando Fernandez said he expects the channel to contribute 10-15% sales in India in the next three-four years, from 2-3% at present. “India is a very special place because richer Indians and poorer Indians live in close proximity that basically provide demand and supply of labour, making quick commerce a logical channel to grow,” he said, adding that the mix in the channel is much better and favourable for margin improvement.