How Quick Commerce is Reshaping the Consumer Behavior in India?

How Quick Commerce is Reshaping the Consumer Behavior in India?

A RedSeer survey found that less than 10 percent of riders see it as a long-term career opportunity. Still, this business model will boom, reaching $5 billion by 2025.

By Manisha Bhatia, Author

Mar 17, 2022 / 10 MIN READ

The rapid digital adoption has augmented the growth of the e-commerce industry in the past few years. While the Covid-19 pandemic became the primary reason for the downfall of many industries, it served as a boon for the e-commerce industry, boosting its growth at a breakneck speed. 

The lockdowns, social distancing, and mandatory safety precautions have pushed consumers to change their purchasing habits by switching to online shopping. Essential commodities such as medicines, milk, and staples which consumers usually preferred to purchase offline were also bought online without any hesitation. This rapidly changing consumer behavior has fuelled competition amongst the retail giants besides boosting their profits by leaps and bounds. 

Let’s look at the few trends which will play a pivotal role in driving this trend in the next few years.

The Digital Shopping Experience of the New-Age Shoppers

The changing shift in consumer shopping behavior was quickly adopted by the young and middle-aged population. This shift has not only enhanced customers’ experience but has also increased their expectations from the brands for providing them a quick, smooth, and innovative online shopping experience. As per the Shopify Future of Commerce Report (India) around 85 percent of the consumers between the age group of 18-34 years, 90 percent of the middle-aged consumers between the age group of 36-45 years have shifted to online shopping during the unprecedented times of Covid-19. 

Efficient Customer Service

Great customer service will be instrumental in driving the customers to a particular online brand for purchase. This will include free shipping, fast and safe delivery, convenient and easy return process, easy pick-up options, and expedited refund options. Earlier e-commerce was offering expedited shipping and free delivery only on the selected product segments. However, the pandemic has fuelled the steep demand for expedited hyperlocal delivery options for product segments such as household items, medicines, health, and groceries with 66 percent of the consumers ready to pay for fast shipping service (as per the Pitney BOX poll). Also, safety being one of the major concerns, brands have been providing multiple offers to encourage customers for using digital payment modes, no signature or physical contact during the delivery of products. 

Changing Dynamics of Consumer Behavior

Consumers these days are looking for convenience besides safe and quick deliveries. They are even browsing and purchasing products which they used to rarely purchase online before. 

A study reveals that around 60 percent of the customers from the 75 percent who said they will try different online brands during the lockdown restriction are likely to continue even after the restriction has been lifted. To maintain this shift in loyalty, brands will have to focus on strengthening customer relationships by providing efficient customer service, good quality products, and a seamless digital experience. 

Bijou Kurien, Chairman, Retailers Association of India (RAI) said, “Retailers have started adapting to the changing consumer and unlocked new ways of reaching them and building demand for new product categories. By actively collaborating with technology, payment, and logistics partners, retailers have expanded their reach tremendously. A new era of retail is dawning on us, and retailers are getting prepared for it.”

Rapid Adoption of Digital Payments

Pandemic has not only transformed the way people shop, but it has also changed their payment habits as it provides a safe, quick, and hassle-free payment experience to consumers. While consumers have rapidly adopted digital mode of payments at the e-commerce stores, this shift is even evident at retail stores. The retail industry believes this behavioral change will persist even post-pandemic. To maintain the same, the e-commerce industry is integrating the latest technology into operations to stay abreast of competitors. 

Adoption of technology such as AI/ML for route optimization will lead to expedited delivery, warehouse optimization, and personalized experience which will help companies in catering to the changing consumer behavior in the retail industry.

Rise of Home-Grown Independent Businesses

Pandemic has boosted entrepreneurship as people realized the instability of their corporate jobs. Small and independently owned businesses have witnessed a boom in the past two years. They offer a unique and personalized shopping experience to their customers, great customer service, and curated products catering to the niche needs of customers. Research reveals that around 83 percent of consumers were interested in buying from local brands to support entrepreneurship and buy unique products. Even the existing small businesses are upgrading themselves by moving online for example PPE products such as sanitizers, immunity boosters, sanitizers, homemade pickles, chutneys, cookies, etc. are manufactured at small factory units and sold online either through their shops or retail giants such as Amazon, Flipkart, Big Bazaar, etc.


Socially Responsible & Sustainable brands

Today’s consumer is smart and educated. They are aware of the negative effects of global warming on the environment and communities hence they want to know the brand face, brand values, and whether the brand is sustainable or not. Also, there is a rising trend of customers being actively supporting homegrown local businesses hence components such as authenticity, social accountability, community benefits, and transparency will play an important role besides the product quality and service.

Increasing Customer Acquisition Costs

The growing Quick Commerce industry has intensified the competition hence increasing the cost of digital marketing to acquire a new customer base and retain the old ones. In generic terms, brands are following customers through advertisements on different mediums with pandemics adding fuel to the fire. Brands are even trying newer channels such as connected TV and messaging apps, voice shopping, and influencer marketing. Popular social media platforms with a strong customer base are also becoming increasingly competitive by pushing brands to establish customer relationships on various channels thereby increasing customer acquisition costs.

Moving forward, brands will need to continuously improvise their operations and invest in omnichannel strategies focused on offering relevant and quick solutions to the customers. This will help them in compensating for their lost-in-store revenue as well as create a robust customer pipeline for future purchases. The changing consumer habits in the rapidly expanding Quick Commerce industry is an excellent opportunity for brands to create a strong foothold of their business in the market and future proof their business against uncertainties.

Although Quick Commerce promises super-fast delivery and draws in impulse buyers, the rider’s safety has turned out to be a major concern. The pressure of delivering within 10 minutes has increased the cases of rash driving, traffic rules violations, and accidents. Hence, it is increasingly becoming a critical issue for quick commerce firms as they are scaling operations. 

A RedSeer survey found that less than 10 percent of riders see it as a long-term career opportunity. Still, this business model will boom, reaching $5 billion by 2025.

The rapid digital adoption has augmented the growth of the e-commerce industry in the past few years. While the Covid-19 pandemic became the primary reason for the downfall of many industries, it served as a boon for the e-commerce industry, boosting its growth at a breakneck speed. 

The lockdowns, social distancing, and mandatory safety precautions have pushed consumers to change their purchasing habits by switching to online shopping. Essential commodities such as medicines, milk, and staples which consumers usually preferred to purchase offline were also bought online without any hesitation. This rapidly changing consumer behavior has fuelled competition amongst the retail giants besides boosting their profits by leaps and bounds. 

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