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Time of India
03-07-2025
- Business
- Time of India
India's quick commerce booms in metros, but stays in slow lane in non-metros
Academy Empower your mind, elevate your skills India's quick-commerce sector is growing rapidly but struggles to scale profitably beyond metros, with non-metro areas contributing a mere 20% of gross merchandise value (GMV) due to lower demand, digital maturity, and local shopping habits, a report to market research firm Redseer, the Indian quick commerce industry grew by approximately 150% year-on-year during the first five months of 2025, fuelled by the rapid rollout of "dark stores," aggressive category expansion, and fierce despite this explosive growth and the presence of quick-commerce platforms in over 100 cities, non-metro cities (excluding the eight metros) contribute just over 20% of the sector's is starkly disproportionate to their 60-70% share of the overall retail market in India's top 100 cities, highlighting a significant untapped potential -- but also raising questions about the sector's ability to scale profitably in these per day per dark store drop sharply beyond the top 10-15 cities, falling below 1,000, and further below 700 in the next 20 the scale-up curve of a typical non-metro city (beyond the top 15) suggests that these cities tend to plateau out before the 1,000 OPD mark, reflective of weak demand, Redseer noted.A variety of factors contribute to this: many users in smaller cities have lower digital maturity and trust in online platforms, which limits how often they place orders and their comfort with digital density is lower in these areas, so there are simply fewer potential customers within each delivery preferences are highly specific, and the product selections offered by quick-commerce platforms often don't reflect these tastes, reducing their appeal to local strong local retail networks persist. Residents have long-standing relationships with local mom & pop store owners, who also facilitate home deliveries on credit in smaller cities is also a major hurdle. While the lack of demand maturity leads to lower average order values, the low demand city results in a larger delivery radius and higher delivery combined effect is that the breakeven dark store throughput in the smaller cities increases by 1.5-2x vs metros, making it highly challenging, Redseer challenges persist, there are bright spots. Student hubs like Prayagraj and Varanasi, and upscale cities such as Chandigarh, are showing robust demand for quick commerce."Quick commerce has unlocked incredible convenience in metros, but scaling it beyond demands more than just replication. Success in smaller cities will hinge on hyper-local strategies , deeper demand and supply understanding, and operational agility," Kushal Bhatnagar, Associate Partner at Redseer Strategy Consultants, to global management consulting firm Kearney, the quick commerce grocery market is expected to grow threefold between 2024 and 2027, reaching about Rs 1.5 lakh crore to 1.7 lakh crore.
Time of India
03-07-2025
- Business
- Time of India
Quick commerce divide: Metros lead as demand booms in top cities; small towns drag with just 20% share despite 150% growth
India's quick commerce industry is sprinting ahead in metros, but non-metro cities continue to trail behind, held back by weak demand, low digital adoption, and entrenched local shopping habits, according to a report by Redseer. Tired of too many ads? go ad free now The sector expanded nearly 150% year-on-year in the first five months of 2025, driven by aggressive rollout of dark stores, rapid category expansion, and intense competition. Yet, non-metros account for only a little over 20% of gross merchandise value (GMV), despite platforms having a presence in more than 100 cities, PTI reported. This share is significantly lower than their 60–70% contribution to the total retail market in the top 100 cities, highlighting both a large untapped opportunity and the difficulty of building a profitable business in these locations. Daily orders per dark store see a steep fall beyond the top 10–15 cities, dipping below 1,000 — and further under 700 in the next 20. According to Redseer, most non-metros tend to plateau before reaching 1,000 orders per day, underscoring sluggish demand in these markets. Challenges range from low digital literacy and trust in online platforms to sparse population densities and localised preferences that don't align with standard quick commerce offerings. Consumers in smaller cities often maintain strong relationships with local kirana stores that offer informal credit and free home delivery, reducing the incentive to shift online. Meanwhile, the cost of servicing these markets remains high, as lower order volumes force larger delivery radii and higher payouts. These dynamics push up the breakeven throughput for dark stores in smaller cities by 1.5 to 2 times compared to metros, Redseer said. Tired of too many ads? go ad free now Education hubs like Prayagraj and Varanasi, and affluent towns such as Chandigarh, are bucking the trend with encouraging demand. 'Quick commerce has unlocked incredible convenience in metros, but scaling it beyond demands more than just replication. Success in smaller cities will hinge on hyper-local strategies, deeper demand and supply understanding, and operational agility,' said Kushal Bhatnagar, Associate Partner at Redseer Strategy Consultants, the agency quoted. According to estimates by global consultancy Kearney, India's quick commerce grocery market is likely to triple in size from 2024 to 2027, reaching Rs 1.5–1.7 lakh crore.
