Fast and furious: Startups tweak operations in shift to quick commerce lane

Sweet Karam Coffee, a Chennai-based snacking company, has shifted its supply chain from a centralised fulfilment model to a regional hub-based setup to speed up deliveries.

“We optimise by rationalising our SKU mix based on performance, designing fulfilment-friendly packs, and keeping logistics lean through smaller, more frequent dispatches,” company co-founder Nalini Parthiban told Mint.

Baker’s Dozen has set up warehouses in all major cities over the past year to distribute products in areas with higher demand, in addition to its centralised manufacturing facility in Ahmedabad, to ensure faster turnaround for quick commerce.

“This is a great channel for new-age consumer companies like us as it provides access in a much bigger way without having to go through a brick by brick setting up of offline distribution in every place,” said Sneh Jain, founder of Baker’s Dozen, adding that quick commerce is the biggest channel.

Multiple restocking

Quick commerce – where deliveries are offered in as few as 10 minutes – thrives on speed and a focused range of products. Companies such as Sweet Karam Coffee have adapted their backend operations, packaging lines and inventory management for this format by leveraging tech and tailored processes. Parthiban said the company’s revenue has grown almost 6x over the past year, with about 50% of the monthly revenue from quick commerce.

Wholsum Foods, which owns Slurrp Farm and Mille products, has accelerated its procurement and production cycles to replenish stocks up to three times weekly.

“We fulfil locally, manage smaller batches, and replenish inventory multiple times a week to meet tight delivery timelines. In comparison, our D2C and e-commerce channels rely on centralised fulfilment, allowing for broader assortment and larger pack sizes,” company co-founder Meghana Narayan explained, adding that the vertical has grown more than threefold over the past year and contributes about 25% of revenue.

Fireside Ventures, which is an investor in these brands, said many of its portfolio companies recorded tremendous growth through the quick commerce channel over the past 6-9 months.

“For many of our brands, this is easily the fastest-growing channel and likely will also become their largest channel very soon,” said Adarsh Menon, operating partner at the investment firm.

He said Frubon, a dairy startup that is already present in general and modern trade, is aggressively building out its quick commerce business.

“We have rented additional refrigerated vehicles to ensure better delivery both in terms of delivery timelines as well as quality,” Frubon’s co-founder Rahul Verma said.

The company’s integrated supply chain includes the procurement of raw milk directly from Rajasthan with a manufacturing set up at Mahindra World City, Jaipur. This end-to-end control ensures consistent production and controls the overall cost, he added.

Sauce, an investor in consumer startups such as Whole Truth Foods and Hocco, expects most of its companies to be ready with a quick commerce strategy, said Yash Dholakia, a partner at the firm.

Quick commerce has given several early-stage startups an opportunity to interact with their target customer base across different geographies without the added cost of establishing their presence through their own stores or entities.

Earlier this month, Swiggy Instamart said it had expanded to 100 Indian cities to address the growing demand for 10-minute deliveries, especially in smaller cities such as Raipur, Siliguri, Jodhpur and Thanjavur, underlining the growing prominence of quick commerce. Blinkit and Zepto have also expanded their presence.

Limited shelf space

While quick commerce presents a fast-growing opportunity, companies struggle with establishing a presence in an overcrowded market and grapple with managing inventory across dark stores, from where deliveries are made to consumers. They have to keep an assortment of products ready for delivery by accurately predicting demand and figuring out the logistics of transporting them from warehouses to dark stores multiple times.

The cost difference comes from the ad / marketing spend that a young brand has to incur on q com platforms given the limited shelf space versus general trade that make visibility an important aspect to consider, Frubon’s Verma said, adding that the channel contributes about 20% to its overall revenues.

Sauce’s Dholakia said the margin profile needs to align with quick commerce requirements.

“Given the limited space and SKUs in dark stores, companies must ensure they can sell multiple units per order and optimise the value-to-weight ratio.”

Companies typically shell out 10-15% of their marketing budget on quick commerce, making it one of the most expensive distribution channels.

“When the differentiation between platforms is not very clear, the players as well as the brands have to keep spending more to get people to download the app and use it,” Fireside’s Menon said.

Several quick commerce giants have been charging additional fees to customers in recent months as they strive to become profitable.

“As this increases, there will be more pressure on consumers to pay an additional price and at some point, I do expect tapering or a moderation of users availing these services,” Menon added.

The $3 billion industry may face challenges in scaling past the top cities in India, Blume Ventures said in its Indus Valley Annual Report 2025. It noted that quick commerce companies may find it challenging to keep up the growth momentum in the medium to long term as they are likely to face hurdles in low total addressable market, tapering growth in monthly transacting users, and increased competition.