Qcom thrives in metros but faces hurdles in smaller cities: Redseer

Despite quick commerce players extending operations to over 100 cities, Redseer notes that non-metro representatives of 90+ cities contribute just over 20 per cent of quick-commerce GMV

Quick-commerce platforms in India continue to see growth in metros, but expansion into smaller cities is proving more challenging, according to a new report from consulting firm Redseer Strategy Consultants.

 

The report highlights that while the sector has grown by around 150 per cent year-on-year during the first five months of 2025 — driven by dark store expansion, wider product selection, and category diversification — the contribution of non-metro cities to overall business remains limited.

 

Despite Qcom players extending operations to over 100 cities, Redseer notes that “non-metro representatives of 90+ cities (excluding 8 metros from 100+ cities) contribute just over 20 per cent of quick-commerce gross merchandise value (GMV).”

   

According to a report by HSBC Global Research, the number of quick-commerce dark stores in India grew significantly, rising from approximately 1,800 at the end of FY24 to over 4,000 by FY25. This figure is projected to reach around 5,500 by FY26, driven by the continued expansion of major players such as Blinkit, Zepto, Instamart and others.

 

Lack of demand

Redseer’s report further notes that demand drops off sharply outside the top cities. “Orders per day per dark store drop sharply below 1,000 beyond the top 10–15 cities and below 700 in the next 20 cities,” Redseer noted. It added that many non-metro cities plateau before reaching 1,000 orders per day, signalling “weak demand”.

 

The report outlines four main reasons for the sluggish uptake in smaller cities:

 

• Lower digital literacy and trust among new users
• Lower population density, which reduces potential order volumes
• Highly localised preferences not yet reflected in available Qcom assortments
• Strong consumer loyalty to local stores, which often provide informal credit and home delivery

In terms of operations, the economics of running Qcom in smaller cities appear unfavourable. Redseer’s report states that in these regions, lower average order values and larger delivery radius lead to higher logistics costs. As a result, “the breakeven dark store throughput in the smaller cities increases by 1.5–2x vs metros, making it highly challenging”.

 

However, the report also states that some of these cities, such as Prayagraj and Varanasi, which are student hubs, and upscale cities such as Chandigarh, reflect a strong quick-commerce demand.