FMCG major's Q-commerce sales double in one year and now account for 33-36% of total e-commerce sales – Industry News

Executives at top companies including Dabur, Parle Products, ITC and Nestle said the contribution of quick commerce sales to total e-commerce sales of fast-moving consumer goods (FMCG) companies has doubled in a year.

FMCG q-commerce sales as a percentage of e-commerce sales Companies are now at 33-36% compared to 17-18% a year ago.

Parle Products' q-commerce share of its e-commerce sales has surpassed 50% since 2013, said Mayank Shah, vice president of the company, but this growth has taken two to three years to materialize, and sales through the channel have been stable.

This is CIn its FY24 annual report released last week, the company said e-commerce and modern trade contributed 31% of its total sales in FY24, up from 17% in FY20. Most of the growth was driven by q-commerce, it added.

Nestle India Chairman and Managing Director Suresh Narayanan, in a recent media interaction, said e-commerce, led by q-commerce, will drive significant growth for the company and account for 7% of domestic sales by March 2024. Five years ago, e-commerce sales at Nestle India stood at 1.3%, according to Nestle's latest annual report. Q-commerce was not a driving force behind the business then, the company said.

In India, e-commerce, including Q-commerce, as a channel, accounts for 7-10% of FMCG sales, modern trade accounts for 12-15% share and general trade accounts for around 80%.

Executives said the growing popularity of the Q-commerce platform and aggressive efforts by players such as Blinkit (owned by Zomato), Zepto, Swiggy Instamart and BBNow (owned by BigBasket) were contributing to the sales growth.

“The speed and convenience of qcommerce delivery has contributed to the surge in qcommerce FMCG sales in the past one year,” Davar India CEO Mohit Malhotra said.“We see quick commerce accounting for 30-35% of total e-commerce sales, and we see this number growing,” he added.

Parle Products' Shah said Qcommerce companies are being innovative in their sales and distribution strategies. “For example, Zepto has Zepto Pass, which offers unlimited deliveries in a month for Rs 99. This helps in facilitating deliveries,” he said.

According to experts tracking the market, Zepto introduced a platform fee of Rs 2 for certain users in March, while Swiggy Instamart and Blinkit do not charge any platform fee for grocery orders..

A recent Bain & Company report said leading Indian q-commerce players have improved their unit economics due to a combination of scale, higher average order value, increased order density and value-added charges.

Bain said qcommerce is currently largely limited to larger metros and tier 1 cities, but players are expanding into tier 2 and tier 3 markets.

The report further states that by leveraging geo-mapping technology to set up dark stores, these platforms can deliver 60-70% of orders within 30-40 minutes.