The landscape of retail is experiencing rapid transformation, driven significantly by digital platforms that are altering how urban consumers approach purchasing. Kanaka Bhagwat, the head of eCommerce at NielsenIQ, emphasized this shift, noting a notable transition from “top-up to stock-up purchases.” This change highlights a broader trend of consumers increasingly valuing convenience and a diverse range of products when shopping online.
According to the latest data, sales of ready-to-eat foods have surged notably, with growth of 52% in quick-commerce channels during the July to September quarter compared to the previous year. This figure is complemented by significant growth in related categories, such as salty snacks and refined edible oils, each reporting increases of 41%. Other categories, like biscuits and packaged flour (atta), also showed substantial growth rates of 40% and 39%, respectively.
The rise of quick-commerce platforms, such as Zomato-owned Blinkit, Swiggy Instamart, and Flipkart Minutes, reflects a significant shift in consumer behavior. Traditional purchasing patterns have evolved, allowing consumers in urban areas to make bulk purchases—something that previously required a trip to a physical store. For instance, consumers are now opting for larger bulk packs of essential items, including rice and cooking oils, directly from their mobile devices. This is not just about convenience; it’s also about accessibility and speed, enabling purchases to be completed in mere minutes.
Analyzing the data from recent earnings calls, it is clear that fast-moving consumer goods (FMCG) giants such as Nestlé, ITC, Hindustan Unilever, and Dabur are witnessing robust growth attributing much of this success to their eCommerce and quick-commerce strategies. The figures illustrate that for the quarter ended September 2024, eCommerce and quick commerce collectively contributed a staggering 85% to incremental sales in metropolitan markets. This is a stark contrast to the same period last year, where traditional, offline channels dominated with an 85% share.
This dramatic change in consumer behavior raises essential considerations for businesses. With traditional kirana stores maintaining their share, contributing roughly 85% to overall FMCG sales nationally, the emerging digital landscape complicates the retail dynamics. Firms are responding by readjusting their inventory strategies in general trade channels to better align with the online purchasing trends.
Moreover, the impact of these platforms isn’t limited to consumer choices alone; it extends to how companies structure their supply chains and marketing strategies. As urban consumers become more accustomed to quick delivery and a wider selection of products, businesses are challenged to innovate continuously. This could mean investing in better logistics capabilities or diversifying their product offerings to meet evolving tastes and preferences.
The need for businesses to pivot towards a more digital-first approach is evident. For instance, by leveraging data analytics, brands can gain insights into consumer purchasing behaviors, allowing them to tailor their product assortments and promotional strategies effectively.
In parallel, the rise of mobile shopping applications is helping to facilitate this evolution. As consumers become more comfortable with making significant purchases through their smartphones, companies must ensure that their platforms offer seamless, user-friendly experiences that encompass everything from browsing to order fulfillment.
To position themselves effectively in this new marketplace, businesses must also invest in clear communications and storytelling around their products. This will help in engaging the modern consumer who favors brands that resonate with their lifestyle and values.
In summary, online platforms are fundamentally reshaping purchasing behavior among urban consumers. This shift is fueled by a desire for convenience, speed, and variety, ultimately paving the way for a more dynamic retail environment. Companies that adapt quickly and prepare to meet these changing consumer demands will not only survive but thrive in this ever-changing landscape.
