E-commerce and Q-commerce: Revolutionising retail and consumer convenience

The rumours of the death of traditional retail in the hands of e-commerce are vastly exaggerated.

By Jaspreet Bindra  

Remember the kirana mom-and-pop stores in the analogue age? They were as ubiquitous as they are now, dotting every corner of the urban landscape. Each of them had a friendly owner who knew you by name, and many had a ‘chhotu’ or a ‘thambi’ – a young employee who would home deliver your orders to you in minutes if you called them to do so. The benefits of this arrangement flowed across the value chain: the kirana person increased both his sales and his reach, the consumer got super convenience and speed, and the young ‘chhotu’ in the shop got employment as well as training to build his own shop in the future.

Impact of E-commerce

Therefore, I was more than a little puzzled on the brouhaha when a leading minister expressed concern around e-commerce creating unintended negative effects on consumers and their buying habits. Perhaps the concern was around the perceived loss of business and livelihood the kirana trade would have, as e-commerce eats into their business and, thus, into the vote bank. Or, perhaps, the concerns were genuinely around the hypothetical damage this could do to customers lifestyles and the mom-and-pop trade.

I found this to be much ado about nothing, because I believe that e-commerce, and especially q-commerce or quick commerce, is doing what technology does best: enabling and organizing an already existing but fragmented practice, that of quick home deliveries from provision stores. And much like that practice, I believe that this one too has benefits across the value chain.

Let’s look at traders first. I believe that the rumours of the death of traditional retail in the hands of e-commerce are vastly exaggerated. Even in a developed market like the US, it is estimated that after decades Amazon has about 5% of the total retail sales there. In India, I daresay it would be lesser. Most e-commerce players, whether Amazon in the US, or Lenskart and Nykaa in India are busy opening offline retail stores to complement their digital operations. With the advent of quick commerce, which will be half the online grocery market soon, it is a similar story. No stores are closing, and 71% of Tier 3 city vendors have seen an increase in sales from their stores after they shifted to online sales, for example In fact, offline stores are themselves getting on their own q-commerce bandwagon. Mint reports that MK Retail and The Organic World in Bangalore are tying up with logistics providers and slashing home delivery windows by half to 15 minutes, driving up customer satisfaction and building differentiation against its competitors.

Advantages to the Consumer

The benefit to consumers is evident. They get deliveries faster and at their home, now from stores across the city and not only from their neighbourhood kirana store. Also, due to economies of scale as well as a direct D2C model, q-commerce platforms are often able to offer products 10%-15% cheaper to them. The same Mint article quotes a Mumbai resident Mahima: “So many of us order groceries every day depending on what we want to cook that day. I want the convenience of receiving my order in 10 minutes," The grocery companies and brands gain: Dabur, Nestle, HUL and Tatra Consumer have reported high double-digit growth on e-commerce channels in their latest Q1 FY 23-24 earnings. In fact, smaller brands gain more than the global majors - a report by Elara Securities stated that quick commerce platforms account for between 1-2% of the sales of major FMCG brands and 7-8% for smaller brands, and more than 80% of the e-commerce sales of FMCG companies come from Qcommerce.

Then there is the case of livelihood generation. In a country where we have lakhs of people applying for a few constable or sweeper posts, gig work afforded by q-commerce affords immediate livelihood and earning opportunities. There are about 4L delivery riders in India for e-commerce, earning between Rs 15000 to Rs 23000 per month, with q-commerce engaging nearly half of them. The creation of franchised dark stores creates entrepreneurship opportunities at a local level. I do believe that a lot more needs to be done for the welfare of these gig workers, who go through stressful commutes, and I hope the e-commerce companies and the government rise to the occasion here.

Thus, I believe that e-commerce and q-commerce is one of the best use cases of digital technologies that we have seen at scale, as it helps consumers, producers, traders and livelihood generation. A friend I met was only half joking when he mentioned that he and his wife thought that quick commerce should be declared as a digital public good, much like UPI and Aadhar! An exaggeration no doubt, but not without its merits.

(Jaspreet Bindra is the Founder of Tech Whisperer Limited in UK.)

Views are personal, and do not represent the stand of this publication.