Bhaskar Khas: Quick commerce business will grow at a faster pace due to increasing urbanization in the country: CLSA report

Rapid urbanization in the country will change consumer attitudes towards shopping and will also increase the acceptability of quick commerce. According to a comprehensive report by brokerage and investment group CLSA, the quick commerce business is growing at a rapid pace due to factors such as less infrastructure requirement, shorter delivery time of goods. Stores used by quick commerce companies require only a modest structure and most deliveries are made on two-wheelers and do not require much space for parking. Once the order is booked, the packers in the dark store start putting the different products into a packet and then the goods are picked up by the delivery partner and then delivered to the customers. Starting with grocery, Kwik Commerce is now entering multiple categories. Urban areas have a higher population of migrants. These consumers have limited connections to retailers, and as such, quick commerce is growing at a faster pace in other areas than in areas where social or familial ties to local stores are greater. With rising numbers of female workforce participation, Kwik Commerce will also offer the best balance between convenience, assortment and price that traditional grocery stores will find difficult to provide. However, the success of Quick Commerce will depend on removing layers in the supply chain and increasing efficiency to reduce delivery costs. India's rapid urbanization as well as a somewhat fragmented retail market have paved the way for the rapid rise of quick commerce. One of the biggest advantages of quick commerce is that it provides a wide range of products and services to customers at their doorsteps, while in contrast nearby retail merchants prefer to stock only the best-selling products to maximize their earnings. While retail stores have limited selection and lack of price transparency, Kwik Commerce offers customers more competitive pricing with multiple selection options. However, Kwik Commerce is currently available only for limited cities. Quick Commerce provides a high-end option with the best selection and in addition to the advantage of low prices, ensures delivery of the item at home in just 10-20 minutes. Quick Commerce is transforming the country's retail supply chain by reducing distribution networks, increasing access to new brands, and offering greater price competition. The size of the country's retail market is currently approximately $1 trillion The current size of the country's retail market is approximately $1 trillion and it is fragmented. Mainly the unorganized sector where small and unregulated retailers have a market share of 95%. While the largest category food and grocery contributes approximately 60% to the retail market. Zomato's Blinkit, Zepto and Swiggy Instamart have over 90% market share in terms of revenue.

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