<p>Bengaluru: The rapid adoption of quick-commerce platforms coupled with discounting could wipe off 25-30% of kirana stores, according to a report by investment and advisory firm Elara Capital. As such, Kirana stores’ business has already declined by 25%-30% due to same reason. </p><p>Quick-commerce platforms provide fast moving consumer goods (FMCG) at a discounted price with superior user experience, including door-step delivery within minutes - a business model which has hooked Indians rapidly. Resultanly, retailers have seen the margins they get from FMCG companies getting eroded to 10-12%, as against 18-20% in the pre-Covid era.</p><p>The e-tailers have started offering more FMCG products. Today these products account for 10-12% of their bouquet of wares, rising from 4-5% in the pre-Covid days. To keep up with competition, the Mom-and-Pop shops have embraced united payments interface (UPI) payments and also facilitate delivery, communicating with customers over social media, particularly WhatsApp.</p>.About 75% of e-commerce vendors on Meesho are new entrepreneurs.<p>Though earlier supermarkets too grew at the cost of the neighbourhood grocer, they were not as disruptive and continued to coexist, unlike the rout quick-commerce is inflicting, the report pointed out.</p><p>Quick-commerce companies derive more than 90% of revenue from the top 10-12 cities and continue to test the waters in the non-metro markets. On the future outlook of quick-commerce, the report suggests, “If these firms are able to scale up beyond metro cities with sustainable profitability, it will be a big win-win, as growth rates of 70-80% year-on-year (YoY) for the quick-commerce segment could continue up to 2030 and beyond. As it is, most e-commerce companies derive approximately 50% of sales from non-metro markets.”</p><p>It may be recalled that All-India Consumer Products Distribution Association (AICDF) had recently approached the Commerce Ministry to pass the Digital Competition Bill which would cap discounts provided by quick-commerce platforms by implementing a minimum sales price (MSP). If implemented, it is bound to have a negative impact on growth rates of quick-commerce adoption, added the report.</p>
<p>Bengaluru: The rapid adoption of quick-commerce platforms coupled with discounting could wipe off 25-30% of kirana stores, according to a report by investment and advisory firm Elara Capital. As such, Kirana stores’ business has already declined by 25%-30% due to same reason. </p><p>Quick-commerce platforms provide fast moving consumer goods (FMCG) at a discounted price with superior user experience, including door-step delivery within minutes - a business model which has hooked Indians rapidly. Resultanly, retailers have seen the margins they get from FMCG companies getting eroded to 10-12%, as against 18-20% in the pre-Covid era.</p><p>The e-tailers have started offering more FMCG products. Today these products account for 10-12% of their bouquet of wares, rising from 4-5% in the pre-Covid days. To keep up with competition, the Mom-and-Pop shops have embraced united payments interface (UPI) payments and also facilitate delivery, communicating with customers over social media, particularly WhatsApp.</p>.About 75% of e-commerce vendors on Meesho are new entrepreneurs.<p>Though earlier supermarkets too grew at the cost of the neighbourhood grocer, they were not as disruptive and continued to coexist, unlike the rout quick-commerce is inflicting, the report pointed out.</p><p>Quick-commerce companies derive more than 90% of revenue from the top 10-12 cities and continue to test the waters in the non-metro markets. On the future outlook of quick-commerce, the report suggests, “If these firms are able to scale up beyond metro cities with sustainable profitability, it will be a big win-win, as growth rates of 70-80% year-on-year (YoY) for the quick-commerce segment could continue up to 2030 and beyond. As it is, most e-commerce companies derive approximately 50% of sales from non-metro markets.”</p><p>It may be recalled that All-India Consumer Products Distribution Association (AICDF) had recently approached the Commerce Ministry to pass the Digital Competition Bill which would cap discounts provided by quick-commerce platforms by implementing a minimum sales price (MSP). If implemented, it is bound to have a negative impact on growth rates of quick-commerce adoption, added the report.</p>