D2C brands hitch a ride on the quick commerce wagon

As quick-commerce players find their foothold among consumers, brands are all set to step up their presence on these platforms.

Other than consumer goods and groceries, quick commerce has become a preferred platform for direct-to-consumer (D2C) brands.

D2C brands growth in quick commerce has overtaken traditional e-commerce and the channel is currently proving to be more profitable as well, several players told Business Standard.

Quick pick-up

Varun Alagh, co-founder and chief executive officer (CEO), Honasa Consumer — the parent firm of D2C brands such as Mamaearth, The Derma Co, and BBlunt — had said that the company’s sales through quick commerce are growing at a much faster pace than traditional e-commerce platforms.

“Quick commerce is growing at a very fast pace, around 4-5 times faster relative to some other larger e-commerce platforms and is more profitable.

"In terms of contribution to sales, it was not even in the top 10 until last year.

"Currently, it has already entered our top 5,” he said.

However, this growth has not been limited to skincare brands like Mamaearth.

According to Sameer Mehta, co-founder and CEO of consumer electronics brand BoAt, the channel is proving viable for electronics as well, especially for premium devices.

“Before Blinkit came along, I don’t think anyone thought there was a quick-commerce space available.

"We are seeing amazing growth on these platforms.

"We believe that, by March 2025, at least 5 per cent of our overall business would come from quick commerce,” Mehta told Business Standard.

Regardless, the higher growth on quick commerce is also a result of the low-base effect.

Until last year, quick commerce did not gain traction as a category.

Gaurav Khatri, co-founder and CEO of wearables brand Noise — BoAt’s largest competitor — said: “On paper, the growth is very high because the base was almost zero a year ago. We are seeing great demand. It is beyond what we expected.”

Khatri added that Noise currently accounts for 50 per cent of the market share in the smartwatch category on Blinkit.

More profitable

Quick commerce gained popularity during the pandemic with the promise of 15-minute grocery deliveries.

Now, the leaders operating in this space have recently expanded to include bigger-ticket items like electronics, fashion, beauty and eyewear.

“Quick commerce has certain advantages over traditional e-commerce.

"For instance, cash-on-delivery payments are low while prepaid orders are very high and there are low rates of (product) returns.

"So, it allows for better efficiency, which could improve margins,” said Khatri.

Moreover, the difference in consumer behaviour on quick commerce versus e-commerce platforms is also leading to better margins.

“People who want a better deal tend to prefer e-commerce platforms, and people who want touch and feel will go offline.

"Consumers on quick commerce are convenience shoppers who want products immediately.

"They are a different set of consumers altogether.

"They are not seeking deals and discounts,” said Mehta.