India's quick commerce booms in metros, but stays in slow lane in non-metros

India’s quick-commerce sector is growing rapidly, but struggles to scale profitably beyond metros, with non-metro areas contributing a mere 20% of gross merchandise value (GMV) due to lower demand, digital maturity, and local shopping habits, a report said.

According to market research firm Redseer, the Indian quick commerce industry grew by approximately 150% year-on-year during the first five months of 2025, fuelled by the rapid rollout of “dark stores,” aggressive category expansion, and fierce competition.

Yet, despite this explosive growth and the presence of quick-commerce platforms in over 100 cities, non-metro cities (excluding the eight metros) contribute just over 20% of the sector’s GMV.

This is starkly disproportionate to their 60-70% share of the overall retail market in India’s top 100 cities, highlighting a significant untapped potential--but also raising questions about the sector’s ability to scale profitably in these markets.

Orders per day per dark store drop sharply beyond the top 10-15 cities, falling below 1,000, and further below 700 in the next 20 cities.

Further, the scale-up curve of a typical non-metro city (beyond the top 15) suggests that these cities tend to plateau out before the 1,000 OPD mark, reflective of weak demand, Redseer noted.

A variety of factors contribute to this: many users in smaller cities have lower digital maturity and trust in online platforms, which limits how often they place orders and their comfort with digital transactions.

Population density is lower in these areas, so there are simply fewer potential customers within each delivery zone.

Local preferences are highly specific, and the product selections offered by quick-commerce platforms often don’t reflect these tastes, reducing their appeal to local consumers.

Additionally, strong local retail networks persist. Residents have long-standing relationships with local mom & pop store owners, who also facilitate home deliveries on credit informally.

Profitability in smaller cities is also a major hurdle. While the lack of demand maturity leads to lower average order values, the low demand city results in a larger delivery radius and higher delivery payouts.

The combined effect is that the breakeven dark store throughput in the smaller cities increases by 1.5-2x vs metros, making it highly challenging, Redseer said.

While challenges persist, there are bright spots. Student hubs like Prayagraj and Varanasi, and upscale cities such as Chandigarh, are showing robust demand for quick commerce.

"Quick commerce has unlocked incredible convenience in metros, but scaling it beyond demands more than just replication. Success in smaller cities will hinge on hyper-local strategies, deeper demand and supply understanding, and operational agility," Kushal Bhatnagar, Associate Partner at Redseer Strategy Consultants, said.

According to global management consulting firm Kearney, the quick commerce grocery market is expected to grow threefold between 2024 and 2027, reaching about Rs 1.5 lakh crore to 1.7 lakh crore.