With online groceries becoming increasingly used by many Indians, more and more online retailers are today offering deliveries within just 10 to 15 minutes! Defined as Quick Commerce, the phenomenon was jumpstarted by the pandemic alongside online shopping itself. Industries have been compelled to adapt and reinvent themselves because of consumers' demand to receive what they want when they want it. Competing over who can deliver products the fastest, these retail establishments have used ‘Going Dark’ as one strategy for effectively adjusting to the speedy delivery paradigm.
Dark Stores Model
While the term ‘dark shops’ might sound rather grim, it is one of this decade's most flourishing business concepts –micro fulfillment centers. These tiny warehouses are inaccessible to the public and are positioned in high-demand regions devoted to quickly fulfilling online orders. Customers may buy what they need online within minutes without stepping out of their homes or entering a brick-and-mortar store. Once the orders are placed, they are delivered by customer delivery assistants or CDAs in less than an hour, and in some cases even within a few minutes, to the address entered by the customer.
Dark stores leverage click-and-connect facilities and high stock volume to seamlessly facilitate the delivery of orders in an area within a radius of 2-3 kilometers. Proper SKU management enables pickers to precisely select, pack, and ship as online orders are placed since inventory is constantly changing. They have an added benefit over traditional grocery stores in that many are open 24/7, and all of them, 365 days a year, are ready to deliver orders to consumers whenever they need them. Dark stores provide more significant potential for revenue generation than physical stores because they offer transparency of stock levels and better storage space to accommodate a wider variety of items.
These facilities can also help numerous retailers in the same region with their retail fulfillment needs. The dark store approach gives retailers access to information about their stock levels, enabling better inventory selection and management. They can run more effectively by utilizing cutting-edge technology at the loading, storage, and pick-up phases. These shops have superior cold storage facilities that keep perishable commodities fresh for extended periods.
Neighborhood Stores-led Q-commerce
The neighborhood store-led model is the second forthcoming Quick Commerce form quickly evolving. Under this, one may purchase from merchants in their neighborhood and local sellers, with delivery platforms arranging for order fulfillment. Customers still receive speedy delivery because delivery distances are typically under 3 km, but they may now choose from millions of goods from thousands of local stores. As a result, customers may now purchase long-tail items and have them delivered quickly.
Q-commerce in India
Today, numerous Indian last-mile delivery businesses follow the dark store business model, including Zepto, Zomato, Swiggy, Dunzo, and more. But the availability is limited to a few quick-moving goods from a selected number of companies.
Contrarily, quick commerce service providers such as Kiko Live have given local vendors and customers the option to purchase from any product category covered by Q-commerce. With the upcoming ONDC initiative by the Indian government, customers on all platforms will soon have the option of buying from local shops and receiving speedy delivery within a few minutes. To help encourage homegrown vendors and neighborhood merchants, it will allow them to sell their products through the ONDC platform itself.
Since small neighborhood shops, as we all know, have historically relied on walk-in clients to sustain their business, a digital presence would allow them to conduct more business and bring almost all product categories under the tent of Q-commerce. Compared to typical e-commerce vendors who may be thousands of kilometers apart, ONDC is anticipated to hasten the pace at which customers trade with local suppliers and regional retailers.
The Way Ahead
The competition to finish deliveries extremely quickly has just started as new competitors enter the market. India is the second-largest online market in the world, with nearly 750 million internet users, and that number is continually rising. According to research by Bain and Flipkart, the e-retail market in India grew by 25 percent in FY21 and is expected to increase at a CAGR of 25–30 percent over the following five years. Given that India is moving quickly toward a digital economy and that the quick-commerce market is still in its early stages of development, the industry has enormous potential. With a predicted CAGR of close to 27 percent between FY 2022 and 2027, the Indian Q-commerce sector will only continue to grow further in the years to come.