Dosa-batter maker iD sees quick commerce surge, grows 100x in 2 years

Sales through quick commerce channels have surged dramatically, increasing over 100-fold. The company, which earned close to Rs 500 crore in FY23, clocked Rs 17 crore every month from quick commerce during the first three months of 2024, the report said. Two years ago, the figure stood at Rs 15 lakh per month.

The convenience of quick commerce has changed the approach of households, reducing the need for next day meal planning, as everything became accessible within 30 minutes, the report added.

Founder and CEO of iD, PC Musthafa, said quick commerce expansion hasn’t killed offline sales, which still dominate their revenue stream. However, he emphasised customers’ preference for convenience and predictability, highlighting the shift towards quick commerce over scheduled delivery models.

Swiggy Instamart, Zepto, Blinkit, and BB Now rank as iD’s top quick commerce platforms. Musthafa acknowledged the Bigbasket has been displaced by others, attributing this shift to consumer preference for quick commerce, though Bigbasket remains strong in scheduled deliveries, particularly for long shelf-life FMCG products.

Profitability potential of quick commerce

While critics have questioned the financial sustainability of quick commerce models, Musthafa believes in their potential profitability, citing uniform margins across platforms and advanced technological infrastructure.

Quick commerce has demonstrated superior returns on iD’s marketing investments, he told Moneycontrol. Unlike traditional advertising mediums such as streaming platforms, television, or newspapers, where estimating the impact of spending is challenging, quick commerce has offered a performance marketing model that facilitates exact measurement of advertising effectiveness, he added.

In quick commerce, the outcome of every rupee spent on advertisements is immediately measurable. iD typically aims for a return on investment ranging from 1x to 3x, and through daily reports provided by quick commerce platforms, they promptly ascertain the sales generated from banner ads, Moneycontrol said. This direct interaction with customers enables efficient conversion, presenting significant opportunities for brands.

Rapid growth of Blinkit, Zepto and BB Now

Quick commerce is rapidly gaining momentum, with competitors like Blinkit and Zepto emerging as frontrunners in a distinctive market. The recent entry of Flipkart into this domain signals further expansion, intensifying competition with existing players like Blinkit, Zepto, Instamart, and BigBasket.

In March this year, Business Standard reported that data analysis from Sensor Tower by BofA Global Research revealed significant growth in daily and monthly active users for these platforms. Between February 2023 and February 2024, Blinkit experienced a 58 per cent increase in its daily active user (DAU) base, while Zepto saw a more aggressive growth of 86 per cent in the same period, boasting one of the lowest delivery rates. Meanwhile, BB Now (from BigBasket) grew by 14 per cent.

Similarly, in terms of monthly active users (MAU), Blinkit saw a 64 per cent rise, Zepto surged by 93 per cent, and BB Now experienced an 18 per cent increase.

Despite Zepto’s rapid growth, Blinkit maintains a significant lead in subscriber numbers. As of February 2024, Blinkit had approximately 23-24 million MAU compared to Zepto’s 16-17 million, a gap exceeding 7 million users.

BB Now, with a MAU between 9 million and 11 million in February 2024, recently upgraded its delivery system to ‘supersaver’ in 40 cities, promising delivery within two hours.

Moreover, Blinkit has successfully transitioned customers from lower to higher average order values, with an average order value of Rs 635, which is Rs 185 higher than its closest competitor, according to BofA Research.

First Published: May 20 2024 | 1:19 PM IST