Quick commerce segment to be a $5 billion market by 2025, says report

Quick commerce, defined as the delivery of consumables under 45 minutes, is slated to see rapid rise in the years ahead, showed the findings of a report by consulting firm RedSeer. According to the report, the segment is currently pegged to be sized at about $0.3 billion (CY2021), is expected to grow by 10-15 times in the next five years to become a $5 billion market by 2025.

The report estimates that about 20 million households are addressable by quick commerce in India with an estimated addressable market size of $50 billion in 2020. Dunzo and Swiggy Instamart are some of the companies operating in this segment.

“Consumables market in India is projected to grow sustainably for the next 5 years at approximately 6 percent CAGR to hit $1 Trillion by 2025 from $725 billion in CY20,” said the report.

“Further, quick commerce penetration within the online consumables market presently at 7 percent, is expected to grow to 12-13 percent by 2025.

"The $3.8 billion online consumables market is expected to grow exponentially and is expected to reach over $30 billion by 2025, of which 50 percent will come from metro and Tier-1 cities,” it added.

Rising adoption among convenience seeking customers with unplanned ordering behaviour, increasing affinity of online and Gen-Z customers towards top-up and indulgence purchases, COVID-led change in consumer behaviour towards using online as replacement for Kirana – are the top reasons listed out by the report as the major growth drivers for the category.

The report revealed that mid to high income households within metro and tier I cities will drive growth for the category as they are convenience seeking and spend across consumables sub-categories.

Commenting on the launch of the report, Mukesh Kumar, engagement manager at RedSeer, said, “Quick Commerce is emerging as one of the fastest growing e-commerce models serving the need for faster delivery among convenience seeking customers. With high fill-rates and 30-45 mins delivery service for unplanned orders, mid-to high income households in Metros are increasingly replacing traditional kiranas with Quick Commerce Platforms like Swiggy’s Instamart and Dunzo.”