Beyond Metros: How deep can quick commerce penetrate in India’s diverse market?

Quick commerce in India has witnessed a phenomenal rise, far exceeding initial expectations. According to advisory firm Redseer, the gross merchandise value (GMV) surged from a modest $0.10 billion in FY20 to an astounding $3.3 billion in FY24.

Looking ahead, Datum Analysis forecasts a further increase to $5.1 billion by 2024—a robust 46% growth. At the forefront of this are Blinkit, now owned by Zomato, Zepto, and Swiggy Instamart. These giants have rapidly catered to the urban consumer’s appetite for instant delivery, transforming daily convenience in metropolitan areas. However, as these platforms tighten their grip on urban markets, a critical question arises: Can quick commerce replicate its success in cities beyond the metros or even in tier 1, 2 towns? Business Today reached out to residents of Tier II cities such as Mysuru, Kanpur, and Ludhiana to gauge the pulse. The response was telling. Many residents still prefer to purchase daily essentials from local markets. “It’s convenient, but we like to go out and buy groceries,” shared a resident from Kanpur. The allure of monthly shopping at retail chains like DMart, More, and local outlets offering discounts also holds strong. Amarjyot, a resident of Ludhiana, admitted to using Blinkit during odd hours but noted that this happens only once or twice a month. In contrast, his daughter, who resides in Bengaluru, is an almost daily user. This disparity underscores the difference in quick commerce adoption between metropolitan and consumers in smaller town. While convenience is undeniable, only a small segment of Gen X and millennials in these smaller towns seem to rely on quick commerce. Yet, Phani Kishan Addepalli, CEO of Swiggy Instamart, offers a different perspective. He reveals that Swiggy Instamart has penetrated 37 cities, including both metros and Tier II cities, with what he describes as ‘amazing’ response rates. Zepto, too, has recently expanded into Jaipur, while Blinkit is pushing deeper into new territories.

Rahul Taneja, Partner at Lightspeed India, a venture capital firm that has invested in Zepto, sees significant potential for profitability in India’s top 15 cities. However, he notes that success in this sector hinges on the specific strategies of individual businesses. Another investor, preferring to remain anonymous, pointed out that while quick commerce could work in smaller cities, it might require adjustments, such as fewer dark stores and potentially longer delivery times. In Bengaluru, a city known for its hustle, adoption of quick commerce varies by neighborhood. A local banker observed that in older parts of the city, many still rely on traditional grocery stores or wait for someone to bring back essentials. “I rarely see families in our area using these apps,” he remarked.

Quick commerce in India is at a critical juncture—much like food delivery services were just a few years ago. Datum Analysis reports that the demand for 10-minute deliveries with average product quality has increased between 2021 and 2024, with 73% of surveyed consumers willing to pay a premium for such convenience.

As quick commerce continues to evolve, stakeholders believe that its success may be largely confined to India’s top cities for now. Only time will tell if this concept can gain traction beyond the metros and penetrate deeper into India’s diverse and vast market.