Quick Commerce - The Current Landscape

Quick Commerce - Indian Market Share

The total revenue of the Quick Commerce industry in the Indian market is projected to reach a figure of US $1408 million by 2023. The Quick Commerce industry is experiencing an annual growth rate (compound annual growth rate) of around 45.13% in the Indian market. This means the potential to grow is not only large but humongous for the business owners. Though the only difference that Quick Commerce brings to the market is last-mile delivery or fast delivery, with more and more customers and resources, companies will be able to provide larger varieties, more discounts, and more convenience to their customers.

Quick Commerce - Market Penetration Rat

The main business of the quick commerce industry is done in urban or semi-urban areas. The reason for this is that consumers here have the income to spare, are too busy to go out to shop for their needs, and are always on the run. Most are young consumers who have fewer responsibilities and more disposable income. The current penetration rate of the Quick Commerce industry in 2023 will be around 0.9% and is supposed to reach 3.5% by 2027 in the Indian market. The current global penetration rate of the Quick Commerce industry will be around 6.7% in 2023.

Quick Commerce - Average Revenue Per User (ARPU)

With 0.9% of the penetrated market, the Quick Commerce industry is currently seeing an average revenue of US 105.10 dollars. The ARPU is calculated as the total revenue of the company divided by the total number of users. This helps the company determine how much revenue each user brings to the table for the company. The average revenue per user is also expected to grow in the coming years. The table for the same looks like this, as per Statista.com −

• 2024 the expected ARPU could be 109.7 US dollars

• 2025 the expected ARPU could be 114.2 US dollars

• 2026 the expected ARPU could be 117.8 US dollars

• 2027 the expected ARPU could be 119.9 US dollars

Quick Commerce - Mckinsey Report

As per the McKinsey report, we have found out some interesting facts about the Indian quick commerce industry. The total worth of the Quick Commerce companies was around 0.3 billion dollars in 2022, and it is expected to grow to more than 5 billion dollars by 2025. However, another interesting fact that Mckinsey's report showed was that the EBITA (earnings before income and tax) of the Quick Commerce companies was on the negative scale, while the brick-and-mortar companies in India showed an EBITA of around 5 to 8%. Profitability and market penetration have been a keen challenge for the Quick Commerce companies. Less profitability for the companies is because of high cash burn, more and more resources for last-mile delivery, and big warehouses or tie-ups with store owners to be available near the customer segment.

Quick Commerce - Growth History

In 2017, the revenue generated by the Quick Commerce companies was a very negligible amount. This was because of the factors of mistrust in the online world, fear of online payment, and the customer's preference to be physically present in the shop at the time of purchase. We see, however, a growth curve for Quick Commerce companies.

Following were the revenues generated by the companies in the past year and the expected revenue that they could generate, as per Statista.com −

• 2018 - Negligible

• 2019 - 6.9 million US dollars

• 2020 - 46.87 million US dollars

• 2021 - 188.10 million US dollars

• 2022 - 543.9 million US dollars

• 2023 - 1408.00 million US dollars

• 2024 - 2878.00 million US dollars

• 2025 - 4482.00 million US dollars

• 2026 - 5630.00 million US dollars

• 2027 - 6247 million US dollars

Though "quick commerce" has been the buzzword and the third generation of commerce, we do not see a lot of difference between quick commerce and e-commerce. With market penetration and more customer acquisition, the current landscape of the Quick Commerce industry is surely going to improve, but until then, companies have to sit tight and let the magic of speed unfold for them.