Quick commerce accounted for over two-thirds of e-grocery orders, one-tenth of e-retail spends in 2024: Flipkart-Bain report

This comes at a time when the quick commerce market in India has been growing at a blistering pace

More than two-thirds of online grocery orders and one-tenth of e-retail spending last year took place on quick commerce platforms like Blinkit, Zepto and Swiggy Instamart, according to a report by Flipkart and Bain and Company.

This comes at a time when the quick commerce market in India has been growing at a blistering pace, even as companies have started to report increasing losses amid heightening competition.

As per the report, the sector reached a total gross merchandise value (GOV) of $7 billion in 2024, up from just $1.6 billion in 2022, and is projected to grow by over 40 percent annually until 2030. This growth is being fueled by expansion across categories, geographies, and customer segments.

“While q-commerce began with grocery, 15–20 percent of its GMV now comes from categories such as general merchandise, mobile phones, electronics, and apparel,” the report stated.

These estimates are in line with heady projections made by market analysts. A recent report by Bernstein stated that the sector is expected to even outpace traditional retail, with an impressive 75-100 percent year-on-year growth.

As per the Flipkart-Bain report, quick commerce contributed around a 50 percent share of incremental growth in the e-retail in 2024. As of last year, the sector had over 20 million annual online shoppers and employed over 400,000 people.

Navigating hurdles

While the quick commerce market continues to grow at a scorching pace, companies operating in the space will need to navigate evolving models and growing competition to drive sustained, profitable growth in the long term, the report stated.

For instance, viability of the quick commerce model beyond the top market is yet to be proven at scale. As much as 85 percent of quick commerce gross merchandise value (GMV) came from the top six cities in 2024.

“Lower order density, purchase frequency, and spend per order (beyond top markets) could adversely impact unit economics,” the report read.

Industry watchers have previously echoed similar concerns. A recent report by venture capital firm Blume Ventures stated that quick commerce firms are likely to encounter hurdles such as a low total addressable market (TAM), tapering growth in monthly transacting users (MTUs), and increased competition from e-commerce players, as they look to scale beyond the top consumer markets.

In addition, these platforms are expected to face increasing pressure on margins with growing competitive intensity, as new entrants such as Flipkart Minutes, Myntra’s M-now, BigBasket’s BB Now, and Amazon’s Tez vie for higher market share and scramble for limited prime dark store locations.

In fact, the current quarter is likely to be another tough one for quick commerce operators as their losses in the January-March period (Q4) will be even higher than what they were during the October-December period (Q3), as per BofA Securities’ recent client note.

To deliver the next wave of growth, the Flipkart-Bain report stated that players need to evolve their supply chains by revising delivery times and setting up larger dark stores to manage a wider range of stock-keeping units (SKUs).