The Association of Indian distributors represents 1.3 crore Kirana shops across India. They are clearly unhappy for a very specific reason. Most of the Quick Commerce players like Zepto, Instamart, and Blinkit are taking the business away from the neighboring Kirana shop by offering delivery in under 10 minutes. The quick commerce business is still a loss-making business, but it does not really matter. VCs and PE funds are all too keen to pour billions into the Quick Commerce plays, despite these losses.

The AICPDF has a single point grouse. Quick Commerce companies are using cheap and unlimited capital to offer very hefty discounts to attract customers. Not only are the discounts (funded by limitless access to capital) steep, but the delivery in under 10 minutes has almost changed the way households manage their inventory. That is the big edge. It is true that quick commerce outfits have an unfair advantage in the form of this limitless access to funds. But, you really cannot hold that against them. The fact, is that quick commerce has redefined the way people shop for their groceries. 

However, not all is hunky dory for the quick commerce players. It remains to be seen how long these players can just sustain this kind of discounting. We just saw the case of Dunzo crumbling due to lack of funds. Dunzo was once the star among the quick commerce players with funding support from Google and a 26% stake by Reliance Retail. The moment the flow of funds stopped, Dunzo went under; and this is a risk for all stand-alone quick commerce plays. It means, the existing quick commerce plays must focus on their revenue and profit models sooner rather than later. The only real question is whether quick commerce will continue to be attractive, once the big discounts are removed from the story! 

This is the time for introspection for both sides of the story. Q-Commerce players have to really start working on cash flow models beyond just eyeballs and footfalls. That is not going to go too far and very soon the VCs and PE funds are going to ask for tangible results. On the other hand, for the Kirana shops, it is time to look at a more customized model combining just-in-time delivery and easy order management. It is not that shoppers are unhappy with the old Kirana model. It is just that Kirana still follows a pull model, while Q-Commerce offers a push model. That is what the Kirana stores must incorporate now!