Retailers report 52% drop in essential goods sales due to quick commerce

New Delhi [India], March 16 (ANI): The rise of quick commerce has caused a significant decline in the sale of food, beverages and confectionery in urban centers, as 52 per cent of physical store retailers reported experiencing the drop, according to a report by global consulting firm PwC.

The report says that beyond food, personal care (47 per cent) and household cleaning (33 per cent) are also experiencing significant sales reductions.

This suggests that quick-delivery models are more disruptive for consumables that consumers frequently purchase in-store.

Quick commerce, also known as q-commerce or on-demand delivery, is a type of e-commerce that can deliver orders in 10 to 30 minutes or less.

However, the report added that despite the downturn in essential categories, niche markets such as childcare, beauty, and wellness appear to be less affected.

This could point to the fact that these categories often involve more considered purchasing decisions, where customers may prefer to shop in-store or may have less immediate need for quick delivery services.

On the flip side, q-commerce’s expansion into tier 2 and tier 3 regions, as per our research, reveals a contrasting narrative as non-metro cities’ retailers remain largely unpressured by Q-commerce’s entry.

On the other hand, q-commerce’s growth in tier 2 and tier 3 cities tells a different story. Retailers in the non-metro areas are largely unaffected by q-commerce.

The challenges in these regions include high delivery costs due to longer distances and inefficient inventory management caused by scattered demand, the report added.

The report adds that despite the aggressive expansion of quick commerce businesses in India, brick-and-mortar retail remains a robust channel in the tier 2 and tier 3 cities.

While several striking findings emerged in the survey, one that caught PwC’s attention was the continued success of brick-and-mortar retail in tier 2 and 3 cities.

The retail market in India is expected to grow to USD 1,892 billion by 2029-30, at a compound annual growth rate (CAGR) of 10.3 per cent, with e-commerce, the fastest growing channel, notching a CAGR of 22.5 per cent and touching USD 220 billion by 2029-30, as per the report.

The PwC report found that nearly 50 percent of Indian consumers prefer a hybrid model, including both online and offline options, when making purchases. (ANI)