“We see a positive response from our users towards large pack sizes,” said Mrunmayi Oke, head, category and growth, Dunzo. “We are giving our users the best deals when they shop in bulk; the margins on such transactions create a win-win situation for users and the platform.”
The economics of serving a consumer with a large pack is significantly less than a smaller or single serve, said Kalpesh Parmar, country general manager at Mars Wrigley India, which sells Galaxy, Snickers, Twix and Bounty, at prices that start from Rs 10 and go up to Rs 200. “Besides, as chocolate buying is a planned purchase online, large packs sell well,” he said.
Executives said large packs also serve as a more convenient option for consumers, a trend that took off during Covid-induced lockdowns and accelerated with surging in-home consumption across both essentials and discretionary products.
“Consumers prefer large packs on ecommerce platforms. Among the reasons for this could be that they associate larger packs with greater offers,” said Neeraj Khatri, chief executive, consumer care business, India and South Asia,
Consumer Care & Lighting. “Also, consumers shopping on these platforms are relatively more affluent and prefer to buy big packs.”
Despite the higher cost of operations and lower discounts on instant services, convenience and impulse buying are driving high conversion rates, executives said.
Discover the stories of your interest
Manufacturers are pushing larger packs on the ecommerce platforms, said Mayank Shah, senior category head at biscuit maker Parle Products. “It’s a win-win for both online platforms as well as companies,” he said. “We get higher margins as ticket sizes and order values go up. For ecommerce platforms, it leads to reduction in the number of deliveries and turns out more viable with better economics.”
A Swiggy Instanmart spokesperson said in an email: “We list products in varied quantity packs. Customers often purchase smaller packs when they want to try something new. During the purchase process, if they buy multiple smaller packs, we help them discover combo packs or larger packs as an option to get the best value for their money.”
Blinkit didn’t respond to queries.
Another reason companies have started to push larger packs online is to differentiate between such platforms and general trade, amid protests by traditional distributors last year alleging that large fast-moving consumer goods (FMCG) makers sell their products at lower prices to wholesalers such as
JioMart, Metro Cash & Carry and business-to-business (B2B) platform Udaan.
“Almost all companies have started differentiating stock-keeping units (or packs) with separate pricing online and kirana stores, which is one way to avoid conflict between trade channels,” Shah said. “That is another reason for larger packs being pushed online.”
The All India Consumer Products Distributors Federation (AICPDF), a grouping of dealers and distributors of FMCG companies with around 400,000 members, last year demanded “equal treatment from companies” and had threatened to halt supplies if demands were not met.
Quick commerce platforms–which aim to reach doorsteps in 10-20-minutes through micro warehouses and small, delivery-only neighbourhood stores–have been growing faster month-on-month in terms of volumes compared to platforms that take four hours or longer, despite steep cash burn. Quick commerce could be a $5 billion market by 2025 from $0.3 billion currently, despite challenges including low margins and high delivery costs, consulting firm Red Seer said in a report. Swiggy, Blinkit and Dunzo all raised additional funds this year. In January, Swiggy raised $700 million (Rs 5,225 crore) led by Invesco for its commerce grocery service Instamart. Blinkit, previously known as Grofers, raised $100 million through convertible notes from
in the year. Online food-delivery and restaurant booking company Zomato is said to be aiming to acquire Blinkit.
Amazon has not entered quick commerce although it services orders in two hours through grocery delivery platform Amazon Fresh.
