Brands such as Wellbeing Nutrition and Arata are looking to diversify their distribution channels through their own websites and offline stores to protect themselves from overexposure to quick commerce.
“The question is not whether the luster of quick commerce will fade; it most certainly won’t. But brands can’t hang on to these platforms, because ultimately they’re just another marketplace. , which means high fees and high competition,” a venture capital investor focused on the early-stage consumer sector told Mint on condition of anonymity.
Quick commerce platforms, similar to e-commerce marketplaces like Amazon and Flipkart, charge fees ranging from 5% to 30% depending on the category, limiting revenue for brands. Selling through a website allows brands to control prices and earn higher profits.
Additionally, brands also need to spend money advertising on these platforms to maintain a competitive advantage, further squeezing profit margins.
However, moving away from quick commerce is not easy.
D2C brands in India had a fruitful year in 2024, with quick commerce gaining popularity and renewed interest in seed funding from early-stage venture capital investors.
New-age D2C brands have already raised more than $400 million from investors by 2024, according to data from market research firm Tracxn.
quick commerce boom
Quick commerce platforms like Zepto, Blinkit, and Swiggy Instamart offer consumers an easy and convenient way to buy groceries and other everyday items, and are rapidly growing for many consumer brands. It is a sales channel.
MyMuse, a Mumbai-based sexual wellness startup founded in 2021, saw a 10x increase in demand for its massagers on Blinkit in 2024 compared to the previous year, said Anushka, co-founder of the brand. Mr.Gupta told Mint.
Wellbeing Nutrition, a health supplement brand backed by Hindustan Unilever Ltd (HUL), is currently INRFounder Avnish Chhabria said QuickCommerce generates 10.5 billion yen a month, with marketplaces (including Amazon and Flipkart) accounting for 41% of total sales.
Honasa Consumer, the beauty and personal care company that is the parent company of Mama Earth, Aqualogica, BBlunt, and others, says quick commerce has emerged as the fastest growing sales channel, with sales almost four to five times more than other online commerce channels. I have seen it grow at a rapid pace. Founder and CEO Varun Arag said this during the FY24 financial results announcement.
Quick commerce channels gained significant momentum in 2024 due to increased interest from consumers and retail investors. While Mumbai-based Zept raised more than $1 billion in capital in six months alone, Zomato and Swiggy increased their cash reserves throughout the year to counter growing competition.
In fact, according to Kushal Bhatnagar, associate partner at Redseer Strategy Consultants, quick commerce will contribute about 8% to overall e-commerce growth in holiday season sales in 2024, compared to 5% in 2023. It increased from
QuickCommerce initially focused on grocery delivery, but expanded to include beauty products and small electronics due to growing consumer demand for fast, on-demand delivery.
Nevertheless, there are limits to what the channel can offer D2C brands.
Brands may break the addiction
“As a business matures, distribution channels change.When we first started, we wanted to be close to consumers, so we started with only a D2C site.Later, we expanded into e-commerce, and then the wave of quick commerce arrived. Maybe in the next five to 10 years, when quick commerce reaches a plateau, the next wave could be offline retail,” Dhruv Madhok, co-founder of hair care brand Arata, told Mint.
Arata recently received a $4 million investment from Unilever Ventures and L’Oreal’s Bold corporate venture capital fund to strengthen its distribution and research capabilities.
Most brands are aware of the limitations of the quick commerce market and are working to reduce their reliance on it.
Arata’s Madhok said the business is about INRFor the foreseeable future, websites, e-commerce marketplaces, and quick commerce channels will easily make $20-25 billion. If necessary, the company will also consider expanding into offline retail in the future, he added.
Additionally, the current price competition aimed at building brand loyalty is expected to level out over time, making it easier for brands to participate on platforms such as Zepto and Blinkit.
In October, the Mint reported on how consumer brands were aggressively pitching for public listings. A category manager working with one of them said the quick commerce platform receives at least six new inquiries every day, increasing competition for limited shelf space in a fast-growing sector. . In April, Swiggy announced that the amount of goods it stores has quadrupled in 12 months.
“Consumers and brands evolve. We do not take discretionary actions based on platform. Overall, prices need to remain stable. You can’t be a part of it because brands are the last ones to get orders. Brands are also getting a lot smarter now. Everybody’s just fighting to get users.” Nutrition’s Chhabria added.
