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India’s quick commerce market to reach USD 5 billion by 2025, report says

Written by Avanish Tiwary Published on     2 mins read

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The online consumables market, which is currently worth USD 3.8 billion, is expected to reach over USD 30 billion by 2025.

The rise in the adoption of internet-based services and the Gen-Z population willing to pay for premium products is leading to the growth of India’s quick commerce sector—companies that deliver goods and services within 45 minutes of ordering.

Bengaluru-based research agency RedSeer said India’s quick commerce sector is set to reach USD 5 billion by 2025. The market penetration of quick commerce, which has an addressable size of 20 million households, is estimated to reach USD 300 million by the end of this year.

Companies such as Google-backed Dunzo and food delivery major Swiggy, which got into hyperlocal deliveries of groceries and other products with Instamart in 2020, are the leaders in this category, according to the RedSeer report.

It said quick commerce offerings fall into buckets: consumables like packaged foods, beverages, groceries, medicines, and pet supplies; and long-tail categories such as flowers, gifts, books, and small electronic items.

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“Quick commerce is emerging as one of the fastest-growing e-commerce models serving the need for faster delivery among convenience-seeking customers,” said Mukesh Kumar, engagement manager at RedSeer.

Users from tier-1 cities such as New Delhi, Mumbai, Bengaluru, and Hyderabad are major growth drivers for these companies. “Mid to high-income households within these cities will drive growth; they are convenience seeking and spend across consumables sub-categories,” the report said.

The online consumables market, according to the report, is currently worth USD 3.8 billion and is expected to reach over USD 30 billion by 2025. It further said tier-1 and metropolitan cities will drive 50% demand in this segment.

Kumar believes platforms like Swiggy’s Instamart and Dunzo, which deliver within 45 minutes, have begun replacing neighborhood stores, locally known as kiranas. While both Swiggy and Dunzo work with kirana stores to pick up items, they have started strengthening their own inventory to meet users’ demand.

Dunzo recently raised USD 8 million from 10 investors as part of its ongoing Series E round. On the other hand, Swiggy received USD 1.25 billion from SoftBank Vision Fund II and existing investors Prosus (formerly Naspers), Accel, and Wellington Management. New Delhi-based Zomato, which went public last week, is also getting into this segment by investing in Grofers, a grocery delivery company. Grofers is reportedly working on delivering groceries within 15 minutes.

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