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RedSeer Report on Quick Commerce 2021

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RedSeer Report on Quick Commerce 2021

  1. 1. © 2021 RedSeer Consulting confidential and proprietary information Bangalore. Delhi. Mumbai. Dubai. Singapore. New York Solve. New Quick-commerce: A $5 Bn Market by 2025 Market Report July 2021
  2. 2. 2 © RedSeer Key Themes of the Report Online and Gen-Z customers have significantly higher affinity for Top-up and Unplanned purchases 2 “Quick Commerce” model emerged to disrupt the Top-up and unplanned purchases 3 Top-up and Unplanned purchases account for two-third of India’s consumables spend 1 13% of the online transacting households are “Quick Commerce” addressable and they spend USD 50 Bn on Top-up and unplanned purchases 4 “Quick Commerce” penetration within online consumables market is ~7% and is expected to grow to 12-13% by 2025 5 Note (s): Quick commerce penetration to online consumables in 2025 is the base case forecast
  3. 3. 3 © RedSeer Top-up and Unplanned purchases account for two-third of India’s consumables spend 1
  4. 4. 4 © RedSeer Consumables market in India is expected to become $~ 1 Tn by 2025 Consumables Spend Per Capita (USD)B 437 557 531 670 As % of GDPB 25% 25% 27% 26% As % of retailA 78% 75% 83% 62% Indian Consumables Market Size & Growth(A) USD Bn, CY 2016 – 2025 F ✓ Increasing willingness & ability to pay premium for superior quality products ✓ Growing market for easy-to-cook foods and at-home delivery, driven by increasing requirement of convenient & hassle-free experience ✓ Demand for healthy and nutritional food & beverages, led by stronger focus on healthy lifestyles & fitness ✓ Rising consumption of newer items through global experiences (e.g. meat, cereals with breakfast, beverages with meal etc.) Sources(s): A RedSeer IP; B. World Bank data +x% Indicates CAGR The consumables market saw a dip in 2020, led by the reduction in overall spending due to COVID Growth Driver 578 753 725 985 2019 2016 2020 2025 F +9% -4% +6%
  5. 5. 5 © RedSeer Indian Consumables GMV – Split by City and Income In $ Bn, by %, CY 2020 Metro and Tier-1 cities would drive the market on the back of increasing spend by mid to high income households; These households are convenience seeking and spend across consumables categories Note: 1.Exchange rate: 1 USD = 70 INR Source(s): Primary Research, RedSeer Analysis Mid to high income households of Metro and Tier 1 (Top 48) cities occupy >50% of the market in Top 48 cities Growth of Consumables in Metro & Tier 1 cities (Top 48 cities) – split by income cohorts; In $ Bn, by %, CY 2020, 2021 F, 2025 F 44% 2020 5% 51% 5% 2019 52% 6% 43% 51% 44% ~$ 77 Bn 5% 2021 F 53% 42% ~$ 81 Bn 2025 F ~$ 72 Bn ~$ 113 Bn -6% +12% +9% High growth in 2021 due to shift in consumer spends to in-house cooking as dine-out was a limited option in cities due to COVID. This segment is expected to grow at a CAGR of 9% from 2021- 2025 reaching ~$ 110 Bn by 2025 Tier-1 (Next 40 cities) 7.0% Metro (Top 8 cities) 3.2% 27.8% 7.7% 1.5% 39.0% 30.9% 19.9% $ 48 Bn 47.2% 2.6% 8.6% 29.3% 31.4% 30.6% 13.4% Tier 1 (Tier-2+) $ 75 Bn $ 602 Bn Growth driving cohort - High income cohorts of Metro & Tier 1 ~$ 72 Bn Consumables market in Metro and Tier 1 – Mid to High Income Cohort ( CY 2020) ~$ 113 Bn Consumables market in Metro and Tier 1 – Mid to High Income Cohort (CY 2025) $ 7500 - $ 15000 $0 - $2500 $ 300000 + $ 2500 - $ 7500 $ 15000 - $ 300000 CAGR%,21-25 X% 10% 7% 12%
  6. 6. 6 © RedSeer Mid to high income cohort in Metro and Tier 1 cities show 3 main purchase patterns Stock-up Top-up Unplanned Purchase Characteristics • Recurring bulk purchases for long term consumption • Dominated by Hypermarkets, Supermarkets, Online platforms • Everyday consumable items • Day to day utility driven purchases (e.g. cooking) • Mostly dominated by Kirana and online platforms • Purchase of consumables in limited amounts as a top up to stock-up purchases or for daily consumption • Need / urge driven purchases • Dominated by traditional Kirana Frequency / Household (Average Transaction value) Key Categories (SKU size / transaction) Sources(s): RedSeer IP and Analysis, Primary Research (IDI); N = 50 Indian Consumables Market - Typical Customer Use Cases Mid-to higher income cohorts 75% Once a month Buy as per need 15% Once in 2- 12 months 10% 15% 55% 30% Everyday Once in 2 weeks Once/Twice in a week 70% 20% Everyday Once/Twice in a week 10% Once in 2 weeks 5 - 10k X Average Transaction value (In INR) ~10k 2-10k 50-300 ~450 ~800 < 500 ~700 ~700 Fruits (1.5-3 kg) Vegetables (1 kg) Daily Dairy (500 ml) Eggs (1 dozen) Bread (1-2 loafs) Fruits (500 g) Packaged Food (150 g) Alcohol (350ml – 1 L) Tobacco (1 pack) Meat (350-500 g) Vegetables (5 kg) Daily Dairy (0.5-2.5 L) Beverages (1.5 L) Home Care (850 ml + misc.) Packaged Food (400 g) Personal Care (200-500 ml) Staples (5 kg)
  7. 7. 7 © RedSeer These consumers make top-up / unplanned purchases much more than the rest of the country. The trend is fuelled by the shift in consumer preference for bite-sized offerings & improved supply side facilities of Quick deliveries (few hours to ~2 days) $ 72 Bn ~35-40% ~60-65% ~30% Overall ~70% Metro & Tier 1 (Top 48 cities) $ 725 Bn Consumables GMV in Metro & Tier 1 (Top 48 cities) –By Customer use case In % and $ Bn, CY 2020 Sources(s): Census Data, RedSeer IP, Consumer surveys (Feb’20 – pre-COVID, Jun’20 – post COVID) CAGR %, ’20-’25 6.5% 9% X% 6% 7% Stock-up Top-up & Unplanned purchase Growth Drivers Shift in consumer behaviour from value seeking to convenience seeking has led to weekly, small sized purchases compared to larger, monthly purchases Big players like Big Basket, Grofers have reduced delivery times, and helped in consumer education / awareness about instant needs Rise of instant delivery platforms like Dunzo, Swiggy Instamart has allowed consumers to complete top- up / unplanned (on-demand) purchases within an hour of ordering
  8. 8. 8 © RedSeer India Consumables Market – by retail channel and city tiers USD Bn, CY 2020 India Consumables Market – by retail channel USD Bn, CY 2016, 2019 & 2020 In market currently dominated by unorganized channel, Organized retail has been systematically gaining share in the market 3% 0.3% 94% 2019 0.5% 3% 8% 89% 2025 F 2020 97% $ 724 Bn $ 985 Bn 0.1% $ 578 Bn 2016 $ 753 Bn 5% 5% 95% +9% -4% +6% Online Unorganized (Kirana led) Organized B&M 5% 16% 52% 1% Metro 0% 5% ∑ = $ 3.8 Bn 82% 3% 75% 16% Tier 1 20% 99% Tier 2+ $33 Bn ∑ = $ 21.3 Bn ∑ = $ 700 Bn $51 Bn $641 Bn CAGR %, ’20-’25 Sources(s): RedSeer IP
  9. 9. 9 © RedSeer Country Overall Metro Tier-1 % share of online deliveries 0.5% 2.8% 1.8% 6% 4% 8% Sources(s): RedSeer IP ~$ 0.7 Bn ~$ 1.2 Bn ~$ 2.0 Bn ~$ 3.8 Bn 2% 0 5 30 3% 35 0% 1% 2025 0.1% 3.0% 0.0% 2017 2018 0.5% 0.3% 2019 2020 ~$ 30.5 Bn Online Consumables market penetration High Low Online Consumables Delivery Market CY 2020 India Online Consumables GMV & Penetration USD Bn, CY 2017 – 2020, 2025 F Online Consumables market penetration to grow exponentially in next 5 years to become..be come $30+ Bn by 2025, ~50% of online market is expected to come from Metro and Tier-1 cities Share of metro & Tier 1 cities 75% 50% Consumables Online GMV Consumables Online penetration % % online penetration – metro & Tier 1 cities ~2% ~7% Covid driven adoption towards convenience has created a big surge in online consumables purchase Inconvenient offline transaction due to poor transport, unavailability of selection will lead to fast online GMV growth Leading online grocery platforms have been investing and optimising their supply chain Rise of instant delivery (TAT <45 Min) platforms allowed consumers to get unplanned consumables within an hour of ordering creating a disruptive alternative to Kiranas Growth Drivers Note (s): Consumables includes non-grocery categories like OTC medicines, tobacco etc.
  10. 10. 10 © RedSeer Quick Commerce Traditional e-Grocers Online Quick Commerce targets top-up purchases by solving Kirana inefficiencies through instant delivery (TAT < 45 mins), convenience and reliability Channels available for shopping consumables CY 2020 Source(s): Primary Research, RedSeer Analysis Offline Channels Online Channels Main Use Case Customer Speaks Stock-up Top-up Unplanned Purchase Major Presence Metro, Tier 1 & Bharat (tier 2+) Metro & Tier 1 Metro & Tier 1 Metro Major Value Proposition • Speed & Convenience • Trust & familiarity • Local relevant product range • Free home delivery: Credit Purchase • Discounts and offers (Limited) • Wider assortments across categories and fill-rates • Convenience of ordering • Doorstep delivery • Discounts and offers • Assortments across category and fill-rates • Enables on-demand consumption • Instant & doorstep delivery • Discounts and offers • Assortment across categories and fill rate Target Audience • Local neighbourhood • Mainly housewives and old loyal customers • Variety seekers • Discount seekers • Shopping experience • Convenience seekers • Young generation new households • Convenience seekers • Young generation new households • Mid to high income cohorts “I can order anytime via phone call and my Kirana delivers, also my husband can just go and buy grocery anytime required” “I like the whole experience of shopping grocery as I see in the mart, lot of options and brands are available there” “As a working mother I like to spend my weekends with my daughter, online ordering grocery helps me save time” “”One morning milk didn’t come on the scheduled time so I ordered on Dunzo. Since then, most of my top-up groceries are ordered here.” Local Kirana Modern Retail
  11. 11. 11 © RedSeer Online and Gen-Z customers have significantly higher affinity for Top-up and Unplanned purchases 2
  12. 12. 12 © RedSeer Key Archetypes Gen Z – Impulse purchasers Ambitious Millennials Gen X – Active Buyers Gen X – Passive Buyers Description • Youngsters living alone or with friends • Social media and experiment driven purchase decisions. Focus more on convenience. • Matured professional living alone or with spouse / friends • Purchase decision driven by product utility, quick and convenient experience • Typically, lives with spouse and children • Purchase decisions driven by family aspirations and convenience • Typically, a joint family / traditional nuclear family • Purchase decisions driven by family aspirations and value (discounts) Demo graphics Age < 25 years 25 - 35 years 35 years + 45 years + Profession of HH members • Early Stage Professionals in Banking, Consulting, IT etc. • Students (with a lower pocket money) • Young Professionals in Banking, Consulting, IT Services, etc. • Startup founders • VP / Director / Senior Management in Banking, Consulting, IT Services, Medicine, etc., • Family business owners • Director / GM / Senior Management in SMBs Income INR 5 Lakh - 10 Lakh INR 10 Lakh - 25 Lakh INR 10 Lakh - 2 Crore INR 10 Lakh - 2 Crore We identified 4 customer archetypes for consumables purchases in mid to high income households within Metro & Tier 1 cities. Key Archetype – Overall Consumables Purchase Behaviour (mid to high income HH) Sources(s): RedSeer IP and Analysis, Primary Research (IDI); N = 50 1 2 3 4 Consumables Purchase Behaviour • Active online shopper with a convenience first shopping attitude • Key factors considered while shopping for consumables: 1. Speed of fulfilment 2. Convenience 3. Price / Discounts • There is a rising shift towards online channels for fresh and staples on-demand and top-up. • Key factors considered while shopping for consumables: 1. Speed of fulfilment 2. Convenience 3. Product quality • Has a mixed purchase pattern between Kirana stores, Super mart and online platforms. • Key factors considered while shopping for consumables: 1. Convenience 2. Product quality 3. Assortments • Shop from supermarkets and Kiranas due to low tech adoption & high trust on kirana. • Key factors considered while shopping for consumables: 1. Price / Discounts 2. Product quality 3. Assortments
  13. 13. 13 © RedSeer Key Archetypes Gen Z – Impulse purchasers Ambitious Millennials Gen X – Active Buyers Gen X – Passive Buyers Wallet Analysis (Overall) Expected increase in unplanned purchases (2020 – 2025) High shift expected with the improvement in on-demand online consumables penetration (Delivery speed and order convenience being the key criteria for benchmarking performance) Moderate shift expected with the shift in customer mindset Gen Z- Impulse Purchasers & Ambitious Millennials dominate in unplanned purchases and their fulfilment methods are based on speed and convenience… Note(s): Numbers are indicative ~30% ~65% ~5% Stock-up Unplanned purchase Top-up ~40% ~40% ~20% ~30% ~40% ~30% ~72% ~15% ~13% Female Male Female Male Snacks, Beverages are key items with little spend on fresh / staples Higher share of staples and fresh purchase in females. Male Female Higher unplanned spends on snacks, alcohol and cigarettes. Male Female Males enable HH purchases of unplanned grocery. Stock- ups are done by the house help / males order it online. Females enable HH purchase. Grocery stock-ups / Planned top-ups are relatively higher in such HH. 1 2 3 4 Sources(s): RedSeer IP and Analysis, Primary Research (IDI); N = 50 Key Archetype – Wallet Analysis (mid to high income HH)
  14. 14. 14 © RedSeer Consumer behavior is shifting towards a higher share of top-up/unplanned purchases Key Archetypes Gen Z – Impulse purchasers Ambitious Millennials Gen X – Active Buyers Gen X – Passive Buyers Willingness to try online deliveries Metro High Very High Moderate – high Low Tier 1 Moderate – high Moderate – high Moderate Low Top up spends online Metro ~ INR 5k / month ~ INR 8k / month ~ INR 6k / month < INR 2.5k / month Tier 1 ~ INR 4k / month ~ INR 7k / month ~ INR 3.5 k / month < INR 1.5k / month Online grocery purchase use case Stock-up Top-up Unplanned Purchases Customer Speaks .I don’t have to plan on what I want; everything is instant. I get to explore new instant noodles which otherwise I wouldn’t have heard of, that too without stepping out.. We are quite satisfied with the online services. I like the scheduled option very much and its so punctual. My wife was worried about the quality of veggies, but she was happy when they got it. We have been purchasing almost everything online especially after the pandemic. What we really like is the convenience of getting everything on our door step. We have started using online apps for most purchases Because I know the shopkeepers, I have trust. They give me offers and best quality materials. I also like walking to nearby kiranas, meeting people. I think I won’t get same trust feel, personal connection, and quality with online. Also, I am not tech savvy. Archetype Attractiveness High Low Online purchases are mostly top-up/unplanned with increasing unplanned purchases Online purchases are mostly top-up with a trend towards unplanned purchase Online purchases are a mix of stock-up and top-up purchases at present with fast growth of unplanned / emergency purchase behaviour Online purchases are rare and mostly unplanned with future potential for top-up purchases. Arrows signify future change of use-case Key Archetype – Online Consumables Purchase Behaviour Sources(s): RedSeer IP and Analysis, Primary Research (IDI); N = 50 Quick Commerce Value Prop Attractive cohort Attractive cohort Attractive cohort Low attractiveness 1 2 3 4
  15. 15. 15 © RedSeer Purchase trend of Unplanned Consumables – Next 12 months N = 706 Purchase trend of Unplanned Consumables – Past 12 months N = 706 Customers increased their unplanned consumables purchases in last 12 months and are inclined to further increase their unplanned purchases in future 28% 26% 29% 33% 28% 35% 30% 39% 27% 6% 7% 6% N= 706 Age < 25 years 2% Overall 2% 1% Age > 25 years N= 152 N= 554 Sources(s): Consumer surveys (June ’21) Q. Have your unplanned consumables purchases increased in COVID lockdown (last 12 months) ? Q. How would your unplanned consumables purchases change in next 12 months? 33% 30% 34% 40% 37% 41% 27% 33% 25% N= 152 Overall Age < 25 years Age > 25 years N= 706 N= 554 Significantly increase Decrease Increase Remain same Significantly decrease • 61% customers suggest that their unplanned consumables purchase would increase in the next 12 months. • This shift of trend is realized due to: – Shift in consumer habits due to lockdown (orders for cravings / snacks & beverages have increased) – The rising speed and convenience brought by on-demand platforms. • 73% customers suggest that their unplanned consumables purchase has increased in the past 12 months.
  16. 16. 16 © RedSeer Q. What are the top reasons for getting your unplanned purchases online? Parameters to prefer online mode for unplanned purchases Ranking, N = 166 Primary mode of unplanned purchase N = 706 Customers make unplanned purchases across retail channels. For customers making unplanned purchase online, convenience of ordering and speed of delivery are the most important criteria Sources(s): Consumer surveys (June ’21) Top 2 parameters 53% 50% 54% 28% 29% 17% 19% 21% 30% Overall Age < 25 Years Age > 25 Years N= 152 Mom-n-pop stores Supermarkets N= 706 Online N= 554 Q. Where do you get most of your unplanned purchases from? 59% 41% 23% 21% 15% 13% 12% 24% 36% 31% 37% 39% 42% 26% 17% 23% 46% 42% 46% 45% 62% Rank 3 Assortment and selection of products Doorstep delivery Speed Rank 2 Convenience Multiple payment options Price and discounts Reliability Rank 1 N= 103 N= 108 N= 13 N= 86 N= 59 N= 31 N= 34 >50% customers feel convenience, speed and price / discounts are the most important reasons to prefer online channel for purchase. Note (s): Customer research was conducted in Mid-to-high income household in Bengaluru, Delhi and Mumbai
  17. 17. 17 © RedSeer “Online Quick Commerce” model emerged to disrupt the Top-up and unplanned purchases 3
  18. 18. 18 © RedSeer Evolution of Indian Consumables Market – By Fulfilment Channels Metro and Tier-1 With increasing prevalence of top-up and unplanned purchases in metro and Tier-1, convenience and speed of delivery have become important; super-specialized platforms have emerged to offer convenience and instant deliveries Timeline » Till 2016 2016 – 2020 ~2020 onwards Offline Commerce Till 2016, consumables retailing was mostly through Kirana stores, with supermarkets as a rising trend. Traditional e-Grocers Driven by internet penetration and eCommerce, consumables deliveries via online platforms saw fast adoption in Metro & Tier-1 Online Quick Commerce Shift in consumer preference for instant delivery of Top-up purchases and convenience created - Online Quick Commerce Customer Behaviour Value / Discount seeking behaviour Convenience seeking behaviour Key Players servicing the market Performance across key parameters Customer Experience • Personalized deal offerings (two-way negotiation) • Standardized discounts • Website first approach • Simpler user journey • Smartphone first approach Product Selection • Manage ~3,000-20,000 SKUs • Manage ~100,000 + SKUs • Manage focused set of 1500-2500 SKUs Type of Fulfillment • Self owned stores (~2,500 Sq.ft.) • Large warehouses (~40,000 Sq.ft.) • Micro Fulfilment Centers (~1500- 2,500 Sq.ft. each) Fulfilment Time Self paced pick-ups 2 hours to 3 days Instant (20-45 mins) Kirana Sources(s): Primary Research, RedSeer Analysis Off-shops Convenience stores
  19. 19. 19 © RedSeer Quick Commerce provides more convenience to customers with its curated selection of products, instant and doorstep delivery,. - Unlike traditional e-Grocers, Quick Commerce platforms have Simple UI and Instant delivery Customer Journey –Traditional e-Grocers vs Quick Commerce Quick Commerce Traditional e-Grocers • Planned monthly / weekly stocking- up • Unplanned urgent consumption • Routine daily/ weekly needs • Additional purchase after stocking-up • Directly opens preferred app to purchase • Searches multiple websites and apps for deals • No additional deal discovery activity required for the goal-oriented customer • Multiple deal discovery and variety offerings • Completes payment; • Searches coupons • AOV ~ $ 12 - 15 • Completes payment; • AOV ~ $ 6 • Orders flow from centralized warehouses to customers • Delivery Time: 6 hrs. – 2 days • Low reliability on timelines • Orders flow from mini- warehouse / MFCs in neighborhood or local Kirana to customers • Delivery Time: 20-45 mins • High reliability on timelines Simpler user experience in Quick Commerce Faster product delivery in Quick Commerce owing to the Micro-Fulfilment Center based model Sources(s): Primary Research, RedSeer Analysis
  20. 20. 20 © RedSeer 13% of the online transacting households are “Quick Commerce” addressable and they spend USD 50 Bn on Top-up and unplanned purchases 4
  21. 21. 21 © RedSeer Sources(s): RedSeer IP & Analysis, Consumer surveys (Feb’20 – pre-COVID, Jun’20 – post COVID) 123.0 11.0 20.0 154.0 31.0 USD 2450 / Year / HH USD 49 Bn Quick Commerce TAM Quick Commerce- Addressable Households CY 2020 and 2025, Number of Households, Mn, N=2752 (consumer survey) ~20 million households are addressable by quick commerce in India with an estimated addressable market size of USD~50 Bn in 2020 Demand-side drivers ▪ Growing number of unplanned purchases in urban households ▪ Shifting consumer preference towards convenience and instant deliveries ▪ Generational habits shifting (Millennials to Gen Z) towards shorter purchases and need for quick, on-demand services Supply-side drivers ▪ Increasing serviceability of quick-commerce in metro and tier-1 cities through multiple micro fulfilment centers ▪ Growing selection and assortments by multiple brand partnerships 185.0 Online Transacting 11.0 Transacting HH in Tier 2+ cities Transacting HH in Metro & Tier 1 Metro & T1 HH earning < $ 7500 p.a. 26.0 Online Quick Commerce Addressable HH 222.0 37.0 USD 2800 / Year / HH USD 77 Bn Quick Commerce TAM Note (s): Addressable market for Quick Commerce comprise of top-up and unplanned purchases of consumables by Mid-to high income households in Metro and Tier-1 cities
  22. 22. 22 © RedSeer “Quick Commerce” penetration within online consumables market is ~7% and is expected to grow to 12-13% by 2025 5 Note (s): Quick commerce penetration to online consumables in 2025 is the base case forecast
  23. 23. 23 © RedSeer Online Quick Commerce Market GMV and Forecast In CY, For CY2020-2025E, By Scenario Quick-commerce market penetration is estimated at USD ~0.3 Bn in CY2021 and is expected to grow to 10 to 17x in next 5 years CY2020 CY2021 ~ 3.1 Bn ~ 1.5 Bn ~ 0.8 Bn CY2025E ~ 0.1 Bn ~ 0.3 Bn ~ 5.3 Bn +133% Conservative Scenario Base Case Aggressive Case Source (s): Expert discussion, Desk Research, RedSeer IP and RedSeer Analysis Note (s): 1. 2021 GMV has been estimated on May’21 run rate of GMV for top 2 players in quick commerce market 2. Quick commerce has been estimated top-down based on 1). penetration of quick-commerce on overall online consumables market, and 2). China benchmarks for online on-demand grocery penetration total online grocery market +..% CAGR % (2021- 25E) 2.6% 6.7% 10 to 17.5% Quick Commerce (% penetration of online consumables) X% Market growth will be driven by rising adoption of quick-commerce among convenience seeking and customers with unplanned ordering behavior COVID led change in purchase behavior will promote growth quick commerce as replacement of Kirana purchase Expansion to multiple cities in Metro and T-1 (top48 cities) from current level of 6 cities Growth Drivers
  24. 24. Appendix
  25. 25. 25 © RedSeer Glossary of terms used in the document (1/2) Terms Used Definition Metro • Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune Tier -1 • Cities other than Metros and with population above 1Million Tier -2+ • Cities, Towns, urban establishments with population less than 1 Million Consumables • Includes core grocery categories (Fresh, Staples, Packaged Foods, Beverages, Home Care and Personal Care), and Other Consumables (OTC, Alcohol, Tobacco and Pet supplies) Online retail • E-commerce or e-tail including buying or selling of products online mainly through websites or apps. Quick Commerce • Online purchase of consumables that gets delivered within 50 minutes Organized Offline retail / B&M • Larger branded stores selling a wide assortment of products ranging from Food & grocery to fashion and BPC Includes formats like discount stores, supermarkets, hypermarkets to specialty chains. Unorganized retail • Products being sold through Kirana stores aka Mom & pop stores and pop-up stores like Paan, beedi (Indian cigarette) shops. Kirana • Mom & pop stores & and pop-up stores – Category B, C & D retailers (< or = USD 30K monthly GMV) Stock-up • Purchases for stocking up of consumables and typically done on monthly basis Top-up • Consumable purchases typically made to replenish/ supplement stock-ups Unplanned Purchases • Consumables purchase typically made at the last moment / emergencies situations GMV • Gross merchandise value CY • Calendar Year (Jan-Dec) FY • From 1-April to 31-March the following year CAGR • Compound annual growth rate INR • Indian Rupee USD/ INR • Indian rupee(I USD = INR 70 – Average conversion rate for CY 19)
  26. 26. 26 © RedSeer Boundary Conditions Approach for TAM: To estimate the total addressable market for Quick Commerce, we look at 4 key levers – Reach, Access, Affordability and Non Stock-up spend Reach Access We look at households in the top 47 cities in India as serviceable cities for Quick Commerce We filter the households with internet access Total addressable market 2020 Note(s): 1. Households with annual disposable income less than USD 7500 have not been considered for Quick Commerce addressable market as their behaviour is more towards value/ discount seeking 2. HH refers to households Affordability Households having average annual disposable household income more than US $7500 1 Metro Tier 1 40 8 City-Tier No. of cities 7 13 #Mn HH2 ~49 Bn USD 20 Mn + Households Share of the consumables wallet spent on non-stock up purchases in a HH Non Stock-up spend Sources(s): RedSeer IP & Analysis, Expert Discussions ~200 USD Monthly Consumables HH Spends
  27. 27. redseer.com Solve. New Disclaimer and confidentiality notice: This document contains information that may be confidential and proprietary. Unless you are the intended recipient (or authorized to receive this document for the intended recipient), you may not use, copy, disseminate or disclose to anyone the message or any information contained in the document. © 2021 RedSeer Consulting confidential and proprietary information Bangalore. Delhi. Mumbai. Dubai. Singapore. New York Thank You query@redseer.com facebook.com/redseerconsulting twitter.com/redseer linkedin.com/company/redseer-consulting

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