Q-Commerce: The Silent Franchise Killer or Key to Future of Franchise Growth?

In the fast-paced digital economy, quick commerce (Q-commerce) has emerged as a transformative force in retail, promising hyperlocal delivery within minutes. For franchisers and franchisees, embracing this model through a dedicated omnichannel store presents an unparalleled opportunity to drive growth, enhance margins, and build customer loyalty, ultimately contributing to franchise growth.

Let’s dive into how a white-labeled quick commerce app can address key challenges and create a win-win scenario for franchisers, franchisees, and customers in accelerating your franchise growth.

Quick Commerce: A Rapidly Growing Market

India’s quick commerce market is growing at a breakneck pace. According to Redseer, the Indian Q-commerce market was valued at $0.3 billion in 2021 and is expected to grow 15x, reaching $5.5 billion by 2025. This growth is fueled by:

• A shift in consumer behavior toward convenience and speed.

• Increasing smartphone penetration, with over 650 million smartphone users in India by 2023.

• Rising urbanization, with 36% of India’s population now residing in urban areas.

This rapid expansion has put Q-commerce platforms like Zepto and Swiggy Instamart at the forefront, often capturing orders that traditionally belonged to established franchisers, thus challenging franchise growth.

The Challenges:

As a franchiser or retail chain owners, your SKUs are likely already listed on platforms like Zepto, Blinkit, or Swiggy Instamart, or Zomato, Swiggy, or Amazon, Flipkart and you are probably delighted with the sales numbers. However, there’s a catch:

1. Low Margins: These platforms operate on high commissions (ranging from 15% to 30%), cutting deeply into your profit margins, negatively affecting franchise growth.

2. Launching Home Brands and Cannibalizing Sales

   One of the biggest challenges is the direct competition posed by these platforms' homegrown brands. Platforms like Zepto have launched initiatives such as Zepto Cafe, while Zomato and Swiggy have invested heavily in private labels or exclusive brands.

   Here's how this affects you:

   • Customer Information Advantage: These platforms have access to your customer purchasing behavior, preferences, and trends, data that they do not share with you. They use this information to curate and launch competing products. For example, if a q-commerce platform notices high sales of a specific SKU (like a snack or beverage), they can easily introduce a similar product under their private label, pricing it competitively to attract customers away from your brand. We have already witnessed it on platforms like Amazon, which promotes its private labels like Amazon Basics and Solimo, and Flipkart, which has its own range of private brands like SmartBuy and MarQ.

   • Market Cannibalization: Once their private labels or home brands are live, they often get preferential visibility on the platform, appearing at the top of search results or promoted through exclusive deals. This reduces your product's visibility and sales, effectively cannibalizing your market share.

   • Control Over Delivery Fees and Promotions: These platforms control the pricing of delivery fees and promotional campaigns. They can make their home brands more appealing by offering free delivery or heavy discounts, further diverting customers from your products.

3. Isolation from Customers: Franchisees and franchisers do not have direct access to customer data, making it harder to innovate or drive targeted marketing for sustained growth.

4. Lack of Experience Control: Relying on platforms limits franchise control over customer experience and brand perception.

In Short, while these platforms may offer reach and convenience, the challenges they bring, particularly cannibalization of sales, pose a serious threat to your franchise's growth and sustainability in the long run.

So...What You Can Do About It?

To thrive, you must explore ways to reduce dependency on these platforms, such as investing in D2C channels, leveraging alternate partnerships, or adopting technology solutions that enable direct customer engagement.

Failure to address these issues could mean ceding control of your market share to the very platforms you rely on. Don’t just adapt—innovate and take charge of your franchise’s future.

Get Your Own Q-Commerce App:

Providing your franchisees/Outlets with their own white-labeled q-commerce mobile app can revolutionize operations. Here’s why:

• For Franchisees:

  • Increased Orders: A dedicated app ensures that customers can directly order from nearby franchisees and get 15 min delivery, boosting sales and driving franchise growth.

  • Improved Margins: Without high platform commissions, franchisees retain more profit per order.

    
    

• For Franchisers:

  • Higher Revenue Margins: By bypassing third-party platforms, franchisers retain a larger share of revenue, contributing to sustainable franchise growth.

  • Better Data Insights: An integrated platform allows franchisers to access valuable data on customer preferences and purchasing behavior, enabling targeted marketing that drives franchise growth.

    
    

The Power of Owning a Q-Commerce Channel - A real world case study

Apollo 24|7: The App launched by Apollo Hospitals, has transformed the medicine sales landscape in India through its quick commerce (Q-commerce) capabilities. Here are some highlights of its operations and achievements:

1. Platform Overview: Apollo 24|7 integrates online medicine delivery, teleconsultations, diagnostic bookings, and personal health records. It provides services across 15,000 pin codes in India, with a commitment to 2-hour medicine delivery in select cities​

   
   

2. Scale and Reach: With over 4,000 physical pharmacies and a digital-first approach, Apollo 24|7 bridges its extensive physical network with a digital ecosystem.

   
   

3. Exponential Growth: Apollo 24|7 has seen a 70% growth in revenue, contributing significantly to its Q-commerce medicine sales growth​ FortuneIndia.

   
   

4. Consumer-Centric Innovation: By combining wellness and clinical advisories, Apollo 24|7 offers a unique value proposition. This includes AI-based health predictors and targeted health programs, enhancing user engagement and retention​

   
   

Apollo 24|7 exemplifies how traditional business models can integrate with modern digital solutions to scale operations to new heights, drive customer-centric innovation, and boost sales.

The Bottom Line: A Win-Win for All Stakeholders

Investing in a quick commerce omnichannel store benefits all parties:

• Franchisers enjoy higher margins and brand loyalty, supporting franchise growth.

• Franchisees gain increased sales and better profitability, further fueling franchise growth.

• Customers receive quality, faster, and more reliable service, contributing to stronger long-term growth for franchises.

Now, if you've made it this far, you might be thinking, "Is the author suggesting I build a platform that costs crores and takes years to develop? That's impossible for my business!" Well, here’s the good news: You don’t have to reinvent the wheel. With Marketplace-as-a-Service, you can get a ready-to-launch platform tailored to your needs, complete with your own branded apps, in just 15 days. And the best part? You save up to 85% on development costs and time.

So, instead of letting big platforms control your growth, why not take charge and build your own ecosystem—quickly, affordably, and with option of complete ownership?

Schedule a demo of ECommNxt, a pre-built marketplace solution designed to help your franchisees boost sales, streamline operations, and enable a powerful omnichannel sales channel. With ECommNxt, your franchisees can leverage white-labeled platforms to enhance their customer experience, improve margins, and achieve faster delivery.

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