Ad revenue boom and brand rush reshape quick commerce

Quick commerce platforms are emerging as a sweet spot for both brands and consumers, riding on targeted consumer behaviour, rising ad revenues, and faster inventory turnover. As per a recent Elara Capital report, the quick commerce segment is seeing a rapid transformation, carving out its own space by delivering everyday essentials at lightning speed — and with it, reshaping how consumers shop.

Consumer behaviour on quick commerce platforms differs sharply from that on traditional e-commerce marketplaces. Unlike e-commerce platforms where category exploration dominates, quick commerce sees more direct product searches. Around 40% of searches on quick commerce platforms are for specific products, while the remaining 60% are category-based searches — a stark contrast to the higher category exploration trend seen in traditional e-commerce. For instance, search volumes for "Lay's chips" are higher than the generic "Chips" category. This targeted shopping pattern highlights how consumers view quick commerce as a convenience-led service, often making impulsive or need-based purchases.

“A data-backed micro understanding of consumer habits within the operating area of dark stores will be essential for a healthy throughput per store and lower payback periods,” says Karan Taurani, senior analyst at Elara Capital. With smaller catchment areas and limited store sizes — roughly 3,500 sq. ft. compared to modern trade outlets like DMart spanning around 40,000 sq. ft. — quick commerce platforms need to optimise product assortments and pricing to maintain profitability.

One of the biggest levers driving growth for quick commerce is advertising revenue. According to the report, the combined annualised ad revenue run rate (ARR) of major quick commerce platforms — Blinkit, Zepto, and Instamart — has already touched ₹3,000-3,500 crore, nearly half of Amazon India's estimated ₹6,700 crore ad revenue in FY24. Blinkit holds the largest share at 45%, followed by Zepto at 35% and Instamart at 20%. What’s remarkable about it is that quick commerce shoppers account for only 8% of India's online commerce users, significantly smaller than the 230 million users in the broader e-commerce ecosystem.

Higher shopping frequency and shorter delivery times have amplified the advertising appeal of quick commerce platforms. Smaller brands, particularly new-age players, are aggressively spending on ads to secure visibility on these platforms. "Ad revenues have benefitted from the rush to onboard products, especially from lesser-known brands that see quick commerce as a faster way to gain market traction," says Taurani. Additionally, quick commerce platforms monetise not only product listings but also post-order delivery tracking windows — the 10-20 minute window where consumers track their orders, creating an extra layer of commercial time.

The demand from brands to get onboard quick commerce platforms is creating a sweet spot for the segment. Quick delivery propositions and higher inventory turnover have made quick commerce an attractive channel to boost sales. However, the limited size of dark stores means platforms must be selective while onboarding brands. “Balancing a mix of consumer-ordered labels from established FMCG giants and smaller new-age brands will be crucial,” warns Taurani.

Quick commerce is already dominating certain categories, accounting for 60-70% of online retail sales of soft drinks. However, its performance outside metro cities remains uncertain. Non-metro markets exhibit non-linear growth patterns due to lower store throughput, higher price sensitivity, and lower impulse purchase frequency. Traditional Kirana stores, with their credit-based purchasing systems, continue to play a dominant role in smaller cities.

In fact, large Kirana stores are now accelerating their own home delivery services, offering both slotted and quick delivery options in nearby areas. This trend could pose further challenges to quick commerce platforms in non-metro markets, where the unit economics remain under pressure. Moreover, with FMCG products forming around 80% of quick commerce GMV (and over 90% in non-metros), diversification into higher-margin categories will be essential for long-term growth, says the report.

As competition heats up, the entry of e-commerce giants into the quick commerce space is set to intensify the battle for market share. Amazon's Tez and Flipkart Minutes have already launched operations in Bengaluru. While incumbents like Blinkit and Zepto currently enjoy a head start, deep pockets and data analytics expertise from larger players could disrupt the segment in the medium term.