Quick commerce makes up third of dosa-batter maker iD's sales; grows 100 times in 2 years

ID founder PC Musthafa on how quick commerce has changed online grocery

About a third of dosa batter and parotta maker iD Fresh Food’s sales come through quick commerce platforms, while mainline ecommerce sales have declined 25 percent over the past two years.

Sales on quick commerce channels have grown more than 100 times. The company, which earned close to Rs 500 crore in FY23, clocked Rs 17 crore every month from quick commerce during the first three months of 2024. Two years ago, the figure stood at Rs 15 lakh per month.

The growth is best captured by ID founder and CEO PC Musthafa’s personal experience. While his family used to make batter at home, they switched to buying iD batter from Bigbasket after he started the company.

“We had a maid at home, and it was not a difficult task, but planning for it was an issue. When Bigbasket came, we could decide in the afternoon about making dosa the next morning. This is not possible if we are making batter at home as we have to wait for a day for it to be fermented,” said Musthafa.

When quick commerce came, their method changed again as the family never had to plan for cooking because everything was available in less than 30 minutes.

Convenience over scheduled delivery

According to iD, quick commerce has delivered exponential growth without cannibalising the offline channel, which still contributes to most of iD’s sales.

“People tend to prefer convenience and predictability over scheduled delivery. Now, customers don’t need to think or worry about whether there is something in the fridge or some products are about to get over. It is about the mindshare that this convenience brings,” Musthafa said.

The top four quick commerce companies for iD are Swiggy Instamart, Zepto, Blinkit and BB Now, in that order.

“Earlier, Bigbasket was the largest online platform for us, which was mostly a scheduled delivery model. But customers have clearly said that they prefer quick commerce, hence others have overtaken Bigbasket for us. Others had the first-mover advantage,” Musthafa said, adding that for long shelf-life products in the FMCG space, Bigbasket is still doing well through scheduled delivery.

Not a flash in the pan

While investors and experts question the financial model of quick commerce companies without customers paying for the convenience, Musthafa is confident that they are using advanced technology that will help them become profitable soon.

“Our margins across platforms are the same - whether it is ecommerce, quick commerce or offline,” he said.

A recent visit to a quick commerce dark store was a revelation for Musthafa, who was impressed by the live packing and sorting at the centre.

“I thought it was just a delivery model. Within 90 seconds of the order, the package left the dark store. The order had all sorts of permutations and combinations from wet to dry, eggs and fruits. All those have to be packed separately to avoid damage in transit. The order in which each item is picked has a lot of technology going into it,” Musthafa said.

Quick commerce has also delivered better returns for every marketing rupee that iD spends. When advertising on streaming platforms, television or newspapers, a company cannot measure the return on the advertising money spent or the sales that take place because of the spending.

However, in quick commerce, it is performance marketing where it is easier to measure the outcome of the rupee spent on advertisements.

“The conversion or the return on investment is immediate. Our metric is 1x to 3x return of the spend and I know by the end of the day how much sales I generated because of the banner ad on a quick commerce platform. They share the report with us every day. Here, I communicate with customers directly and convert them. This is a great opportunity for brands,” Musthafa said.

He added that this advertising model will generate good revenue for quick commerce companies.