Quick commerce has grown to 7-8% of business: Mamaearth's Varun Alagh

Varun Alagh, co-founder and CEO of Mamaearth

For Honasa Consumer, the parent company of beauty and personal care brands like Mamaearth, The Derma Co, and BBlunt, quick commerce continues to be the fastest growing distribution channel, the company’s Chairman, co-founder and CEO Varun Alagh said in an earnings call on February 12.

“As of last quarter, quick commerce has grown to 7-8 percent of our business. It is the fastest growing channel for us. Our goal is that our quick commerce market share should be higher than our e-commerce market share,” said Alagh, while speaking to analysts after announcing the company’s December quarter results.

After slipping into the red in the September quarter, Honasa swung back into the black in Q3 FY25, reporting a flat year-on-year profit of Rs 26 crore. It had reported a loss of Rs 18.5 crore in the previous quarter as it transitioned to a direct-to-consumer (D2C) distribution model as part of its Project 'Neev', which necessitated inventory corrections.

Nevertheless, quick commerce has been the company’s fastest growing channel for about a year now. In May last year, Alagh told Moneycontrol that quick commerce was growing 4-5 times faster than its traditional e-commerce channels.

This momentum has kept pace since, with the company witnessing more than 200 percent year-on-year growth via this channel in the first nine months of FY25, Honasa said in a statement.

Alagh’s comment assumes significance amid an ongoing industry trend wherein major D2C brands, including beauty and personal care segment and FMCG, are looking to ride the fast-growing wave of quicker deliveries and list their products on platforms like Zepto, Blinkit, Swiggy Instamart and so on.

In fact, CEO Alagh has previously mentioned that quick commerce has led to a rise in competitive intensity, as firms like Blinkit, Swiggy Instamart, Zepto, BigBasket and others have made it easier to discover and launch new brands.

“I also think the rapid growth of quick commerce has increased competitive intensity to an extent. If you compare it to modern trade or general trade (like kiranas) then yes, the impact is more but not so much when it comes to e-commerce firms like Flipkart or Amazon,” he said in an earlier interview with Moneycontrol.

This comes as Honasa, under project ‘Neev’, continues to strengthen its offline go-to-market (GTM) strategy, as its flagship label, Mamaearth, has been registering slower growth.

“In Q3FY25, we remained committed to long-term growth, advancing the strategic implementation of Project Neev to strengthen our offline distribution through direct distributors in the top 50 cities…As we scale, our vision remains centered on driving disruptive innovation, deepening offline penetration, and delivering unique value propositions to consumers,” Alagh said in a statement.

Honasa has expanded its distribution network by 22 percent Y-o-Y, reaching over 2.16 lakh FMCG retail outlets as of December 2024, according to NielsenIQ data. As per the company, it also successfully completed “the appointment of Tier-1 distributors in all the top 50 cities” during the December quarter.