Quick commerce is helping brands thrive but can brands afford the success?
Jan 16, 2025
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Nuha Bubere, a reporter from The Ken, delves into the quick commerce boom and its pitfalls for emerging brands. She discusses how these platforms initially offered vital visibility but now impose hefty fees and relentless inventory pressures. The podcast highlights the financial strain on smaller brands and the logistical nightmares of maintaining stock during surges in demand. Nuha emphasizes the struggle for a balance between brand visibility and financial health in this rapidly evolving marketplace.
Quick commerce platforms provide emerging brands with visibility and consumer access, but success comes with high operational costs and challenges.
The pressure to maintain inventory and logistics can jeopardize brand sustainability, often leading to margin-neutral situations despite increased sales.
Deep dives
Opportunities and Challenges for Smaller Brands
Quick commerce platforms have provided smaller brands with unprecedented opportunities to compete against larger FMCG giants. Brands like Blinkit, Swiggy Instamart, and Zepto have created a level playing field where emerging brands can gain visibility and access to consumers they previously lacked. However, the success that comes from such exposure is not always sustainable. Smaller brands often struggle to keep up with the demanding logistics and supply chain management required to meet increased consumer demand, leading to challenges that can jeopardize their operational viability.
The Pressure of Market Visibility
Being featured prominently on quick commerce platforms is essential for brands, but it comes with significant costs. Smaller brands frequently pay hefty marketing fees and high margins to gain visibility, which can eat into their profits. This practice creates an environment where potential financial gains are mitigated by the costs of remaining competitive, often leaving these brands margin neutral despite increased sales. As they pour resources into marketing and logistics, the burden of profitability increasingly weighs down on these brands, leading to a questioning of long-term sustainability.
Balancing Demand with Supply Challenges
The rapid growth of demand on quick commerce platforms can lead to a logistical nightmare for brands, particularly those dealing with perishable goods. For instance, companies like Hovu Fresh experienced enormous spikes in orders during peak times, challenging their ability to meet consumer needs. When demand surpasses a brand's supply capabilities, category managers are often forced to seek alternative suppliers, impacting the original brand’s market position. As a result, many brands find themselves in a precarious balancing act between maintaining product quality and fulfilling consumer expectations amid skyrocketing demand.
A couple years ago, quick commerce platforms were theplace to be for up and coming brands across the country. Just a little sliver of real estate on a rapid delivery app was enough to put them on the map.
But now, many of these brands are very quickly realising that success on a Blinkit or a Zepto is a double edged sword. With it comes high commissions, marketing fees, and the constant pressure to never run out of inventory.
Some brands have now had enough.
How did it get here? The Ken reporter Nuha Bubere explains.
Tune in.
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Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.
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