Vroom time: Expect Big QCom to rev up India’s retail revolution

India’s retail industry is estimated to exceed $1.3 trillion, of which the online slice is still just 5.4%, and QCom less than 0.3%. This slice-up is set to change, with e-com and quick-delivery services having grown rapidly even before the world’s biggest retailers make their debut in India’s QCom space.

The rise of Big QCom, if we may call it that, is likely to disrupt the country’s retail trade in all its forms and also impact other segments of this industry. Traditional retailers, the kirana or corner shops, are likely to be impacted harder than they have been so far by the rise of online sales, or by Qcom pioneers like Zepto, InstaMart and Zomato’s Blinkit.

QCom beats corner stores on convenience as well as the variety of products on offer. Now, kirana stores deliver goods home too, and their prices are comparable. Those who prefer to pay cash on delivery find no difference in the mode of payment either, except that the corner store we have been visiting for years might give us credit for a few days, which QCom services do not.

Yet, the financial muscle of Amazon, Reliance and Walmart-owned Flipkart could spell advantages of scale from the very get-go. They can carry out centralized purchases at volume to obtain discounts deeper than the ones a typical distributor would get from an FMCG major.

The cost of the distribution network that keeps kirana shelves stocked would include not just expenses on logistics, but also the profits of stockists and distributors in the supply chain. Big QCom players could bear the logistical costs, on par with regular distributors, while snipping out the intermediaries involved in kirana distribution to prevent those margins from adding to retail price tags.

In other words, big retailers can sell goods cheaper than corner shops do without inviting charges of predatory pricing by selling below cost. The only other reason to buy from kiranas would be to avail of credit. But such informal arrangements may no longer be sustainable, given the price pressure such small stores face from QCom companies serving the same neighbourhood.

Some corner shops may opt to turn into distribution centres for Big QCom, joining the networks of so-called dark stores that QCom relies on to reach our doorsteps quickly. Some might need to specialize or find other uses for their brick-and-mortar retail space.

In any case, the kids of traditional shopkeepers often aspire to other careers. We can also expect swelling numbers of delivery agents to add to the large armies already employed by online ordering services. India’s fast-expanding base of gig workers would call upon policymakers to institute social security, health and occupation safety rules for them without delay.

Demand for electric bikes and pedal cycles will also go up. If innovation extends to satisfying the needs of single-occupant homes or individual toilers who share an accommodation and a cook, and have no use for stored leftovers, assured quick delivery could even impact refrigerator sales.

Market research combined with AI can predict demand patterns better as volumes expand, allowing inventory savings on just-in-time operations. In sum, Big QCom could change more than what a quick glance might suggest.