The quick commerce sector is shifting strategies to enhance profitability and maximize consumer retention by introducing enticing discounts for bulk purchases. These discounts, often more generous than typical offerings, are activated for cart sizes starting at Rs 1,000-1,500. Such moves not only aim to attract customers but also to optimize the unit economics of the business model.
Quick commerce platforms, which initially focused on delivering last-minute essentials swiftly, are now encouraging larger shopping trips. For example, BigBasket, known for its rapid delivery services, has initiated promotions that offer significant discounts to customers who spend over Rs 1,500 in a single transaction. Similarly, Zepto has unveiled discounts for cart sizes exceeding Rs 1,000, with some locations permitting an even lower minimum purchase of Rs 799.
These incentives are crafted to maximize efficiency while reducing operational costs. According to a chief executive from the grocery sector, this strategy allows delivery platforms to cut down on costs associated with deliveries and packaging. It’s no surprise that companies are weighing these bulk discounts as a means to boost their competitive edge against traditional grocery retailers like Dmart, while addressing the high costs typically associated with urban deliveries.
Notably, quick commerce platforms are mirroring well-established practices from grocery stores where consumers often consolidate purchases to take advantage of bulk incentives. For instance, many supermarkets have long encouraged shoppers to buy larger quantities to get better deals. This has proven beneficial for quick commerce companies, as it reduces the number of deliveries that need to be made—a critical factor when balancing the rising costs of logistics.
Industry statistics reveal that quick commerce services continue to face challenges regarding average order value (AOV). Historically, the AOV in this sector has remained under Rs 500, but there are indications of gradual growth. Data from Blinkit, a market leader, shows an AOV of Rs 660, which represents a 9% increase from the previous year. In contrast, services like Swiggy Instamart reported an AOV of Rs 487 during the last quarter, also showing a 10% year-on-year growth.
Despite the overall sector growth, the quick commerce market struggles to catch up with online retailers and traditional supermarkets. According to a Morgan Stanley report, only about 51% of quick commerce users have an AOV above Rs 750, markedly lower than performance metrics observed in online retail, where nearly 70% of consumers reach this threshold.
Quick commerce platforms are not just catering to impulse buys anymore; they are making strides to solidify their footing for larger, routine purchases, which are still predominantly made at kirana stores and offline retailers. A noticeable challenge that these platforms face is the perception that larger basket sizes have not been fully captured compared to established e-commerce players or traditional brick-and-mortar stores.
A glimpse into the future shows that the quick commerce market likely holds substantial potential. Estimates suggest the market could balloon to anywhere between $25 billion to $55 billion by 2030, compared to its current valuation of approximately $7 billion. Industry leaders predict that with correct implementation of strategies like bulk buying discounts, quick commerce can significantly improve their economic viability.
In summary, the quick commerce industry is adapting to market realities by enticing consumers through bulk purchase discounts. The aim is not only to increase the average order size but also to streamline operations and compete effectively against traditional retailers. As consumer behavior evolves, platforms that strike the right balance between speed, cost, and convenience will undoubtedly lead the new wave of online grocery shopping.
