International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056 Volume: 11 Issue: 05 | May 2024
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p-ISSN: 2395-0072
"Challenges in Quick Commerce: High Costs and Quality Disparities in Fresh Produce" Dhisha S Babu*1, Singareddy Yaswanth*2, Thasmayi C*3, Prof. Sushmitha N*4 *1,2,3(Dept. Of ISE) RV College of Engineering, India.
*4 Assistant Professor (Dept. Of ISE), RV College of Engineering, India.
----------------------------------------------------------------------***--------------------------------------------------------------------------Abstract The quick-commerce sector is experiencing rapid growth due to increasing demand for ultra-fast delivery services. This industry is primarily led by startups, while large e-commerce companies have faced challenges in capturing a significant market share. This paper examines the hurdles that both startups and established firms encounter in the quick-commerce market, including operational, financial, and strategic difficulties that impede profitability and expansion. The analysis is based on data and insights from various market reports and industry studies to provide a comprehensive overview of the current landscape and future outlook of quick commerce. Keywords: Quick Commerce, Kirana Stores, Operational Challenges, Profitability Barriers
1. Introduction The quick-commerce market is expanding, but e-commerce giants are struggling to capture a significant share. Retail powerhouses like Amazon, Walmart, Reliance, and Tata, typically dominant in various sectors, have only managed to secure about 12% of the quick-commerce market. In contrast, new-age start-ups dominate the remaining 88%. According to Datum Intelligence, Blinkit, owned by Zomato, leads with 34.7% of the market share. Swiggy's Instamart follows with 28.5%, and Zepto holds 24.8%. Despite the initial skepticism from larger companies about the viability of quick commerce, the success of start-ups has piqued their interest. However, their attempts have largely been unsuccessful. For instance, Flipkart, supported by Walmart, is preparing to introduce a 10–15-minute delivery service in around 10 cities. This marks its third attempt at quick commerce, following the discontinued Flipkart SuperMart and Flipkart Quick. BigBasket, now under Tata Digital since April 2021, is heavily investing in its rapid delivery service, BBNow. Launched in 2022, BBNow aims to deliver orders within 18-20 minutes across more than 20 cities. Despite being a major player in India's e-grocery market, BBNow has only captured about 9% of the quick-commerce market since its inception. Reliance's JioMart also made an attempt at quick commerce but discontinued it within a year. Similarly, Dunzo, backed by Reliance, introduced DunzoDaily, yet it failed to gain traction.
1.1. Market Dynamics and Competitive Landscape Quick commerce has historically struggled with profitability. In its early years, start-ups faced significant financial losses. For instance, Blinkit reported a revenue increase to ₹644 crore by the end of the third quarter of 2023-24, up from ₹505 crore in the previous quarter. Meanwhile, its EBITDA- adjusted loss narrowed from ₹125 crore to ₹89 crore. Blinkit generated ₹1,533 crore in revenue by December and aims to break even on an EBITDA-adjusted basis by the first quarter of 2024-25. Similarly, Zepto significantly reduced its net loss margin from 277% to 63% and expects to become profitable at an EBITDA level within the next two and a half quarters. Swiggy, which turned profitable in 2023-24, anticipates that Instamart will also achieve profitability in the coming quarters, with revenues rising by 39.7% to ₹3,221.40 crore from ₹2,035.6 crore the previous year through FMCG sales. To accelerate profitability, quick-commerce platforms are diversifying into areas like cosmetics and garments. A report by Redseer, a strategy consulting group, titled "Unveiling India's Q-Commerce Revolution," notes that the quick commerce sector maintained its growth momentum from the COVID-19 period, achieving a 77% increase in gross merchandise value (GMV) last year, despite 2023 being a slow consumption year. The report highlights that quick-commerce platforms have expanded beyond fruits, vegetables, meat, staples, and FMCG to include beauty products, electronics, home décor, wellness items, and other merchandise.
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