From Off-Seasons to Festivals: The Actual Picture of Quick-Comm over E-Comm

In a recent interview, Zomato's founder and CEO, Deepinder Goyal, stated that “quick commerce is not eating into the market share of kiranas. Blinkit is not even affecting companies like Dmart. We are more or less eating into the share of e-commerce players like Amazon and Flipkart, as well as modern retail”. But does the data support this claim?

Our analysis of user activity in July, a period with no significant events or festivals, offers some insights. Quick commerce platforms saw peak activity during this time, with an exclusive active users (fortnightly) of around 8.6 million. Notably, Zepto, a key player in the quick commerce sector, experienced its highest funding round announcement on June 21, 2024, and celebrated its third anniversary on July 15. According to a report by Business Standard, Zepto recorded a 25% increase in orders during this period. In contrast, the e-commerce sector remained relatively quiet, with no major sales events, leading to an active user base of 291 million during 1st to 15th July—one of the lowest levels for Q3.

Even during what might be considered an "off-season," quick commerce continues to grow its presence. However, the true competition between quick commerce and e-commerce platforms becomes evident during major festive periods, such as Rakhi, Independence Day, and Diwali. In August and September, e-commerce platforms recorded significant spikes in user engagement, reaching an active user base of 301 million from 1st - 15th of  August to 312 million between 15th - 30th of September. During the same period, the overlap between quick commerce and e-commerce users grew from 80% in early August to 83% by the end of September, suggesting that Quick-Commerce is steadily capturing more market share of E-Commerce.

As the festival season unfolded, major sales like Flipkart's Big Billion Days and Amazon's Great Indian Festival, which kicked off on September 27, significantly contributed to a 6% growth in the Total Addressable Market (TAM), i.e. the aggregated active user base of e-com and q-com. Despite a 3% increase in overlap from quick-commerce platforms, exclusive active users in the e-commerce sector grew by 7%, surpassing the overall TAM growth. This indicates that while quick commerce continues to expand its reach, traditional e-commerce remains a dominant force, attracting a larger portion of active shoppers during peak sale periods.

Quick commerce platforms are expanding their inventory by offering high-value items, including electronics and white goods, alongside groceries. Despite this, consumer preference currently leans towards e-commerce platforms during festive sales due to a wider range of choices, substantial discounts and user generated reviews, especially on high-value items like electronics.

In conclusion, while quick commerce is gaining traction and slowly carving out its place in the market, the data shows that it is primarily during festival and event sales when e-commerce platforms assert their dominance. However, the growing overlap in user bases between quick commerce and e-commerce suggests an intensified concentration in the near future.