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Small consumer companies are struggling to get their products listed on fast-growing quick commerce sites—finding it as hard as getting funds from investors—as the likes of Blinkit, Zepto and Swiggy Instamart get flooded with innovative pitches every day.
The founder of a Mumbai-based food company has been waiting patiently for a response on his products from all platforms for about seven months now, he toldMint, equating the experience with waiting for an investor to pump in capital into a business.
“I wake up every day with a new idea about how I can impress platforms with my product. This is turning out to be as difficult as scouting for funding from private investors,” the founder said on condition of anonymity.
The founder of an Ahmedabad-based direct-to-consumer food company said he has curated colourful pitch decks filled with statistics on his product’s performance, data on the competition, along with graphs on industry trends, hoping it would make the cut.
Quick commerce platforms get at least half a dozen new enquiries every day, according to a category manager working with one of them, tightening the competition for limited shelf space in the rapidly growing sector. In April, Swiggy said the volume of products it stores had grown four times over 12 months.
“Quick commerce is helping build awareness, reach and sales of many smaller and often regional brands,” Dinker Vashisht, vice president for corporate affairs at Swiggy, said in response toMint’s emailed queries. “We have enabled many new and upcoming brands to overcome the initial distribution and retail challenges. Many of these brands have scaled up since then, and they acknowledge quick commerce’s role in the initial brand recognition and facilitating the first consumer experience.”
Zepto did not respond to queries sent byMint. Blinkit and Flipkart Minutes declined to comment.
Some small companies adopt a different approach and target one platform at a time, putting in their undivided attention into every ounce of effort. The founder of a Pune-based packaged food company spent 12 months pitching to Blinkit and finally got listed on the platform two months ago.
“I’m just catching my breath. I will initiate talks with Swiggy Instamart in a few weeks,” the founder said.
Easier for some
While the waiting period for onboarding food and cosmetics can stretch as long as 10-12 months, other product categories such as electronics and apparel have shorter timelines of two to six months as quick commerce platforms expand their offerings beyond groceries, executives toldMint.
“Food and cosmetics are crowded spaces. They also need to follow many more compliance requirements like FSSAI (Food Safety and Standards Authority of India) licences and registrations from the Central Drugs Standard Control Organisation, which need to be checked by platforms before listing,” said a category manager working at another quick commerce company, asking to remain anonymous.
Apparel purchases tend to be more frequent during festivals, which could mean orders from quick commerce platforms may be faster, the category manager said. Swiggy sells seasonal items like women’slehenga choli during Navratri, while Blinkit offers sarees during the festival.
In the past few months, several smaller companies have been scrambling to find space on the shelves of quick commerce dark stores. After getting tremendous traction over the past year, quick commerce has emerged as a serious challenger to traditional retail channels including general and modern trade.
“All the platforms want to become the go-to e-commerce shopping destination, so an effort is under way to list new and high-quality products in as many new categories as possible,” said the manager.
From selling products such as Nestle India’s Maggi noodles to Maybelline’s lipsticks, quick commerce platforms have become the fastest-growing sales channel for many products.
Honasa Consumer, the owner of personal care brands Mamaearth, Aqualogica and The Derma Co, said in its FY24 earnings call that quick commerce was its fastest-growing sales avenue. India’s biggest FMCG firm, Hindustan Unilever Ltd, gets a sixth of its online sales from quick commerce channels.
Everyone wants a piece of the pie as quick commerce companies offer a fresh retailing option for small consumer companies, helping them cut reliance on general and modern trade channels.
Product discovery is not a very big characteristic of quick commerce platforms, unlike the case in modern retail like supermarkets, where people walk around and spend time looking through a large variety of products, according to Satish Meena, an advisor at Datum Intelligence.
“Customers generally make quick decisions on quick commerce platforms by adding familiar and frequently used products to their cart. Hence, platforms are prioritising brands with good customer recall and repeat purchases,” Meena added.
Dark store constraints
While the success of the pitches by small companies hinges on a range of factors, dark stores hold the key. These micro warehouses are the lifelines of quick commerce operations. Sized anywhere from 5,000 sq ft to 12,000 sq ft, dark stores play a key role in the efficiency of a quick commerce company’s operations, making even small aspects like how items are stocked critical.
“All platforms are in a land-grab mode as they look to almost double their dark store count in the coming years,” BofA Securities said in a report dated 30 August.
Moreover, most consumers are generally sticky and end up using one to two platforms to meet their needs, switching only when they face consistently bad service.
“This is why peers are keen on launching a higher number of dark stores and going after densification,” BofA said in the report.
According to Meena, the battle for limited space is not likely to end very soon because brands are growing in number and quick commerce seems to be becoming more relevant every day.
“But as dark stores expand and platforms generate sufficient data on optimal price points and bestselling categories, the brand selection process could become more polished,” Meena said.
With limited space, it’s wise for companies to stock items that are well known and can move fast, said the category manager cited earlier. Even a single unsold product is wasteful use of shelf space, he added.
He added that personal referrals have emerged as a way to get listed faster. Founders realise they need to build better relationships with companies instead of keeping it only transactional.
Platforms are prioritising brands that have a significant customer base across cities. For very new brands, the founder’s presence on social media could give an edge as it builds an audience.
Companies with large marketing budgets can also commit money towards advertising on platforms. However, this does not guarantee a faster listing, according to the category manager.
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