Open a quick-commerce app to buy biscuits and the shop has already been arranged. A few products appear first, some discounted, others marked popular, while one may belong to the platform itself. While this is convenience for the shopper, it raises a question for the FMCG company. Is the app bringing the brand a new customer, or charging it to reach someone who would have bought its biscuits anyway?

For companies that spent decades building distribution networks, quick commerce offers a new route to growth. Eternal’s Blinkit, Swiggy’s Instamart and Zepto can put products within reach of shoppers who might not otherwise buy them. But they can also redirect purchases from the kirana store to delivery apps, where brands may have to spend on placement and promotions to remain visible. A sale gained by the app is not necessarily a sale gained by the company.

Quick commerce can generate additional demand through new buyers, greater convenience and more frequent purchases. But if existing customers simply change where they shop, the company may incur new costs without adding much to total sales. The question is whether the channel expands profitable demand or makes established brands pay more to capture demand they already had.

Migration Costs

FMCG companies built distribution networks that made their products widely available and difficult for smaller rivals to match. Delivery apps allow younger brands to reach shoppers without first replicating that infrastructure, while contract manufacturing and social media marketing reduce other barriers to entry.

A challenger need not displace an incumbent across an entire category to affect its plans. It can concentrate on premium snacks, regional flavours or health-conscious buyers, competing for pockets of demand that larger companies also expect to drive growth.

Marico’s quick-commerce strategy shows how the channel is reshaping its distribution decisions. Quick commerce now accounts for 5% of its India business, and the company is working with platforms on availability, search and media activation while expanding direct distribution through Project SETU.

Cigarette maker and FMCG monolith ITC's response shows that adapting to quick commerce can extend beyond distribution and visibility to the product itself. It describes producing tomatoes with ripening and shelf-life characteristics suited to quick-commerce platforms, while placing the apps within a wider distribution network spanning traditional retail, modern trade and direct-to-consumer sales. Its response involves changes to sourcing and supply, not just spending on visibility.

Paid placement can be useful when launching a product or reaching shoppers a company has struggled to serve. An established brand repeatedly paying to retain attention presents a different question.

HUL has created a dedicated quick-commerce organisation covering demand generation, availability, supply and technology. The decision recognises that serving the apps requires a different operation from serving general trade, although the additional capability still has to justify its cost.

The litmus test is whether quick-commerce sales add to total business or substitute for purchases through other channels, and what remains after discounts and promotional spending. If customers keep buying after promotions are scaled back, the sales are more likely to be sustainable. Quick-commerce sales can grow rapidly even when the company gains little in total sales and spends more to secure each purchase.

Without that discipline, a company risks increasing promotional budgets to defend app sales without knowing whether the additional spending brings in enough new business to justify the cost.

Competing Interests

Platforms have a commercial reason to encourage suppliers to compete for attention. Established companies may pay to defend visibility while challengers pay to acquire it, allowing an app to earn even when their spending shifts sales between brands rather than expands the category.

Private labels add a further consideration. Instamart has Noice and Supreme Harvest, while Blinkit has WholeFarm. The platform can sell access to shoppers while offering products of its own, with shopping data helping it identify demand and workable prices.

Retailers have long sold their own brands, and data does not guarantee that a product will succeed. Nevertheless, the arrangement requires established companies to negotiate with a business that is both a distribution partner and a potential competitor.

Platforms also have an interest in keeping the relationship viable. Suppliers earning inadequate returns may reduce promotional budgets or withdraw products, limiting the income apps can draw from competition for visibility.

Responding through discounts across the portfolio could make participation more expensive without strengthening customer preference. Companies instead need to identify where their products offer a distinction buyers value and where sales depend heavily on price or placement.

That assessment should determine which launches receive support, which products need changes and which lines do not justify further spending.

For established FMCG companies, quick commerce will justify the additional spending only if it brings enough new demand to outweigh the cost of serving it. Otherwise, what looks like digital expansion may amount to paying a new intermediary to reach customers the company already had.