The convenience factor in shopping within urban areas is beginning to hurt modern trade hard as consumers switch to q-commerce platforms.
Data from market research agency NielsenIQ show that the October-December 2024 period saw a volume decline of 1.1% in modern trade, the first time in 10 quarters.
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Modern trade contributes 12% to fast-moving consumer goods (FMCG) sales while traditional trade’s share is 80% and e-commerce is about 5-8%. Within e-commerce, q-commerce share is one third, sector experts said. But this share is growing rapidly for FMCG companies, prompting them to realign their channel priorities, devoting more time, energy and resources to q-commerce as consumers seek instant gratification.
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“Signs of a slowdown within modern trade was becoming apparent over the last few quarters. But a volume decline shows just how fast q-commerce platforms are moving and its acceptance among consumers,” Krishnarao Buddha, a Mumbai-based marketing and retail consultant, who was earlier with Parle Products, said.
NielsenIQ data show that there has been a steady drop in volume growth for modern trade since the June 2024 quarter. It stood at 6.7% for the June quarter, down by over half from March 2024 quarter (15.4%). By the September quarter, volume growth for modern trade had fallen to 3.8%, data show.
Organised retailers including players such as Avenue Supermarts, which runs DMart, Reliance Retail and Spencer’s Retail have been vocal about the growth of q-commerce and its impact on sales in metros.
Neville Noronha, MD & CEO, Avenue Supermarts, recently said that the impact of q-commerce was to the tune of 1-2% on sales in metros for the retailer, though experts say that it is sharper owing to increased discounting, availability of a wide assortment of products and the trend of unplanned purchases going in favour of q-commerce.
“We stay committed to being the most preferred value retailer to customers in the vicinity of a DMart store or a fulfilment centre of DMart Ready (online platform),”
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