Quick Commerce Survey
The Hype behind Quick Commerce
In the most recent news, Zomato announced its plans to launch 10min food delivery. Quick commerce has been one of the most hyped consumer-tech spaces attracting heavy investments in the Covid period with new players like Zepto and existing players alike trying to get their teeth in!
While Swiggy focused on integrating and building out its erstwhile Stores offering as Instamart, Zomato took a minority stake in Grofer’s new avatar as Blinkit. But this category is under the scanner again and valuation is reducing at “Zepto” speed as the quick commerce companies struggle to hold on due to the cash crunch.
Quick commerce currently is a bleeding business and there is not much room for margins, which is the case all over the world. Internationally, the quick delivery start-up Gopuff and many of the Indian players are said to have plans underway to get into the private-label space to shore-up their margins.
At, Elevate Insights, we conducted an online survey in partnership with Crownit to understand the consumer needs when it comes to buying groceries, fresh produce, and other household items online. We surveyed close to 389 consumers across key metros and Tier 1 towns across India, from SEC A and B, in the 18-35 age group who are online shoppers.
Is under 10 min delivery even a consumer need?
Perhaps the fundamental question to ask here is whether consumers really want delivery under 10mins? What is the consumer definition of “fast delivery”? What are real needs from online delivery for consumers?
Surprise! Surprise? As one would expect delivery under 10 mins was not a consumer expectation for most even as there was a fair amount of divided opinion on what is ideal time by geo, type of need.
Years of consistent marketing messaging by Dominos has built a benchmark of 30mins for instant delivery and that is a consistent playback across all our work around speed of delivery.
There are further nuances by occasion and situational context of consumption. For example, in the food delivery space, speed was a big factor when it came to the lunch at office occasion. It was also seen to be important when ordering something like a dosa or an ice-cream which will spoil if the delivery time is longer. In the context of grocery and fresh produce, we find there are indeed “grocery or other item specific emergencies” where “fast delivery” is relevant for the consumer. Do note a fair chunk of consumers are quite happy to wait a few hours or get delivery the next day!
Culturally, we are however not conditioned to pay for services like delivery. It’s like dhaniya, which is expected free when buying vegetables. When buying stuff, we expect the delivery to be free of charge. After all, our neighbourhood grocer delivers for free! This makes the quick commerce business even harder to sustain.
Even as consumers indicate some willingness to pay for top-up occasions where there is an immediate need, the ground reality is that there is intense competition and new players like Zepto end up offering huge discounts and charge no delivery fees to lure customers. As these discounts dry up, much of the demand also drops out except for the very few occasions when it seems worth it to pay for delivery.
So, what are consumers real needs when ordering groceries and other such items online?
In our survey, we further delved to into the factors which were most important to the consumers when buying these categories online.
Since many of these grocery deliveries are for fresh produce, the quality of fresh items like fruits and vegetables came out as most important for consumers. This was followed by delivery speed and availability of the right selection of products.
Building a brand of grocery delivery
Not surprisingly, since width and depth of selection is critical, especially for regular purchases where the consumer wants specific items and brands However just generating awareness and building penetration is a big task and thats why the multi-category players including Flipkart seem have higher awareness and usage penetration despite dedicated efforts, a very wide assortment and . years of brand-building by Big Basket.
Players like Zepto and Blinkit had comparatively low awareness and usage. Subscription services like Milkbasket and Suprdaily have the lower relevance perhaps in the world of instant delivery.
Swiggy also had the benefit of leveraging existing visitors to its foodtech platform to build awareness and trial for its instant delivery service. We may see Zomato roll-up Blinkit as an offering within the Zomato app to get this advantage!
As a late entrant to an existing category, it makes sense to own a differentiated feature and demonstrate distinct advantage as Zepto did with its 10minute promise.
However, if the core proposition is not a relevant advantage to a sizable audience, the cost of living-up to a 10min promise may come at the cost of its sheer survival. Delivering to key category codes is more important than creating buzz worthy proposition.