Quick Commerce Boom: The Bypass Route That’s Leaving Local Stores Struggling

India’s quick commerce giants are rapidly expanding their network of dark stores — small warehouses strategically placed for ultra-fast deliveries. As of December 2024, Blinkit (owned by Zomato) operates 1,007 dark stores, Swiggy Instamart has over 600 (as of September 2024), Zepto runs more than 200, and BigBasket (owned by Tata) is at 400+. All these companies have aggressive expansion plans for the coming quarters. But here's the big question — how are these dark stores impacting the local kirana economy?

The rising number of warehouses is becoming a nightmare for offline retailers, from supermarkets to small kirana shops. These stores are suffering as quick commerce companies continue to eat into their customer base and revenue.

Why Is Quick Commerce Growing So Fast?

  • Cracking the FMCG supply chain: Quick commerce firms are bypassing traditional distribution systems. They source directly from warehouses and cater to the Direct-to-Consumer (D2C) segment, gradually gaining dominance in the FMCG industry.
  • Hyper-local, ultra-fast delivery: Promises of delivery within 10–25 minutes offer a major edge over traditional retailers and even e-commerce players.
  • Convenience-driven consumer behaviour: Today's shoppers prefer convenience over loyalty. They’re increasingly opting for online options — not just for groceries, but also electronics and personal care items.
  • Predatory pricing practices: Many quick commerce platforms are selling products at heavy discounts — sometimes even below cost. While this is attractive for consumers, it's a calculated move to eliminate competition, especially small and mid-sized retailers.

Even giants like Amazon, Flipkart, and Reliance are in on the quick commerce game, leveraging their fast-delivery platforms within their apps.

The Impact on Traditional Retail

This is an alarming situation for India’s retail ecosystem. Local stores are witnessing shrinking sales and razor-thin margins. With customer loyalty shifting online, these shops are finding it harder to survive.

“We are now only selling daily-use, small packaged items,” said a grocery shop owner in Delhi. “Costlier groceries and bulk purchases are now done online, even for regular items.”

According to the All India Consumer Product Distributors Federation (AICPDF), the rise of quick commerce has led to the closure of nearly 2 lakh kirana stores in the past year alone. The country currently has around 13 million kirana shops, over 10 million of which are in Tier-II cities and beyond.

The data reveals a grim picture:

  • 90,000 stores shut in metro cities
  • 60,000 closed in Tier-I cities
  • 50,000 went out of business in Tier-II and Tier-III towns

The next target for quick commerce players is deep penetration into smaller cities. Platforms like JioMart, Flipkart Groceries, and Amazon Fresh are already reaching remote areas — a move that threatens the very existence of local vendors. On one side, quick commerce startups are bagging billion-dollar valuations; on the other, traditional retailers and distributors are facing existential crises.

Regulatory Loopholes and Rising Concerns

Quick commerce companies are allegedly exploiting gaps in government regulations. “They’re selling near-expiry products at steep discounts,” a customer shared. These practices are under increasing scrutiny.

Restaurant owners, retail associations, and company distributors have raised concerns with government authorities. The Food Safety and Standards Authority of India (FSSAI) has taken note and is set to meet quick commerce representatives to address violations.

The Need for Regulation

AICPDF has called for immediate regulation of the quick commerce sector to safeguard small retailers. It recently wrote to the Competition Commission of India (CCI), urging an investigation into predatory pricing practices by Blinkit, Swiggy Instamart, and Zepto. These tactics, the federation argues, make it impossible for traditional retailers to survive.

Misleading Marketing and Environmental Impact

The “10-minute delivery” pitch, a key marketing gimmick, raises serious ethical concerns. It’s not feasible across all locations or time periods, and could potentially mislead consumers.

There are also environmental concerns. Frequent small deliveries mean more carbon emissions, packaging waste, and delivery pressure. Workers face unrealistic targets and poor conditions, as companies race to meet delivery promises.

In summary, the explosive growth of dark stores is disrupting the local economy. Kirana stores are closing, footfall in malls is dipping, and individual and institutional livelihoods are under threat. While online convenience is the flavour of the day, how quickly commerce players are capitalising on this shift raises serious ethical, regulatory, and environmental questions.

There’s an urgent need for policy intervention. Bodies like AICPDF, CAIT (Confederation of All India Traders), NRAI (National Restaurant Association of India), FSSAI, and the CCI are pushing for government action to restore balance in India’s traditional retail landscape

business