It is cheaper to buy goods from Quick Commerce than from grocery stores. I went to a grocery store for toothpaste and some other items. There the shopkeeper told me it was Rs 265. I had added the same items to my Quick platform cart and I was getting them for Rs 190. If I can get cheap goods at my home, then why would I go to the shop and buy the same goods at a higher price.’
This is what Shubham, a resident of Noida, says, who has left grocery stores and is ordering ration and other daily use items from Quick Commerce. Like Subhash, there are lakhs of urban consumers who are now leaving grocery stores and turning to Quick Commerce platforms like Blinkit, Swiggy Instamart and Zepto. Due to this, the existence of grocery stores has also come under serious threat.
Why are grocery stores in danger?
The biggest threat to grocery stores is from Quick Commerce, which claims to deliver ration items at home in just 10 minutes. Union Commerce Minister Piyush Goyal has also expressed concern over the rapid expansion of central e-commerce companies. In his view, this is not an achievement, but a ‘matter of concern’.
The Union Minister has recently mentioned the decreasing number of small mobile stores. He said, ‘How many mobile stores do you see in the markets now and how many were there 10 years ago?’ He also described the predatory pricing of e-commerce i.e. selling goods with huge discounts as a dangerous trend.
There are about 1.2 crore grocery stores in the country. Their annual turnover is more than 800 billion dollars. They sell grocery items, personal care products and other things. Grocery stores not only fulfill the daily needs of the people, they are also a big source of employment. This is the reason why the government is also concerned about the existence of grocery stores.
How did quick commerce go from flop to hit?
Quick commerce platforms like Blinkint, Swiggy Instamart and Zepto are rapidly leaving behind traditional grocery stores. However, when Quick Commerce started during the Corona epidemic, people’s view on them was quite conservative. They believed that Indian consumers were not going to pay for such services, no matter what. Some people even said that consumers would wait for a day, let alone a few hours, for free delivery.
The Quick Commerce model had failed in most countries. But, it got tremendous success in India. They deliver goods quickly, which is very much liked by housewives and bachelors. In cities, time is considered money anyway and people are happily ready to pay a little to save it.
The contribution of Quick Commerce to the annual e-commerce sales of FMCG companies like Nestle, Parle, ITC, Marico and Emami has reached 30-50 percent. It is anticipated to rise even higher.
How will the existence of grocery stores survive?
If grocery stores have to survive, they will have to go digital rapidly. Some grocery stores provide home delivery facility through means like WhatsApp. But, their capacity in terms of delivery is limited. For example, if three-four customers order together, it becomes difficult for them to deliver the goods on time.
The good thing for grocery stores is that they have the facility to sell open stock, which is a big challenge for Quick Commerce. For example, grocery stores can sell two-three kilos of open flour and rice, but Quick Commerce cannot.
Most grocery stores provide the facility of ‘account system’ to their customers. In this, the account of goods is done at a fixed time. It can be a week, a month or even a year. But, it is difficult for Quick Commerce to provide such facility. Especially, in small towns and rural areas.
Reliance’s model is also a ray of hope
The alliance between Quick Commerce and grocery – stores can also save grocery stores. Currently, most quick commerce has its own dark store, from where they deliver goods to consumers. But, billionaire businessman Mukesh Ambani’s Reliance Industries is now going to take initiative in this direction. Reliance Retail, the retail arm of Reliance Industries, is also going to re-enter the quick commerce segment.
However, Reliance Retail will not compete directly with Blinkit, Swiggy Instamart and Zepto with the 10 minute delivery model. In this, the product will be purchased from lakhs of grocery stores, which will order their goods from Reliance Retail and then it will be delivered to the consumers. Grocery stores are part of the JioMart Partner initiative, under which they buy products from the wholesale arm of Reliance Retail.