Outlook Business Desk
According to a PwC report, the growth of quick commerce has led to a sharp decline in food, beverage and confectionery sales in urban areas with 52% of physical store reporting a downturn.
The report highlights that in addition to food, personal care (47%) and household cleaning products (30%) have also seen notable sales declines. This indicates that quick-commerce models are particularly disruptive for frequently purchased consumables.
Despite its impact on essential categories the report highlights that niche segments like childcare, beauty and wellness have remained relatively unaffected. This may be because these products often require more thoughtful purchasing decisions.
The expansion of quick commerce into tier 2 and tier 3 cities presents a different scenario. Report indicates that retailers in non-metro areas remain mostly unaffected by its entry facing little to no pressure from the growing trend due to high delivery costs of longer distances and inefficient inventory management.
According to the report, India's retail market is projected to reach $1,892 billion by 2029-30, at a Compound Annual Growth Rate (CAGR) of 10.3%. E-commerce is expected to achieve a CAGR of 22.5% and surpass $220 billion by the same period.
The report highlights that despite the rapid growth of quick commerce in India, traditional brick-and-mortar retail continues to grow in Tier 2 and Tier 3 cities. The report particularly noted the sustained success of physical retail stores in these regions.
According to past report by Elara Capital, the rise of quick commerce platforms could significantly impact kirana stores, potentially leading to a 25-30% decline in their numbers.
With Kirana stores, Avenue Supermarts, the parent company of DMart is also facing intense competition with quick commerce.