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Quick commerce is no longer confined to India’s major cities. According to a recent report by Emkay Global, tier-2 cities are emerging as viable markets for rapid delivery services, thanks to lower operational costs and shifting consumer preferences.
Based on insights from 11 industry stakeholders, the brokerage highlights that the economics of quick commerce are becoming increasingly favourable outside metros. While average order density remains lower in non-metros, the reduced cost of real estate and labour significantly lowers the breakeven point—approximately 800 orders per store compared to around 1,300 in tier-1 markets.
"Lower costs are helping close the viability gap, even as players continue to grapple with mid-mile logistics expenses," the report said.
A key driver of growth is the wider assortment offered by quick commerce platforms—up to 8,000 SKUs—far surpassing the 1,000 typically available at local kirana stores. This extensive selection is helping platforms build customer loyalty even in lower-density markets.
Large organized retailers are increasingly adopting a hybrid model, using their existing stores to fulfill quick commerce orders. This has enabled faster scale-up, but challenges remain. Issues such as low average order values, poor fill rates, and reliance on store hours could limit long-term profitability.
To boost adoption, many platforms have leaned on promotional tactics like free delivery and low minimum order thresholds. However, Emkay notes that the long-term sustainability of these incentives remains in question.
Meanwhile, e-commerce giants that once dismissed quick commerce as merely a grocery alternative are now integrating rapid delivery features into their core apps, signaling a more serious commitment to the space.
As the sector matures, the report suggests that success in tier-2 cities will depend on fine-tuning product assortments, improving logistics efficiency, and managing promotional spend—while navigating the complexities of local regulations.
