Quick commerce platforms are experiencing a surge in performance marketing efforts, with the cost of acquiring a customer rising from Rs 400-450 to over Rs 800. Performance marketing allows companies to target potential customers more accurately and measure the return on investment effectively. An executive at a digital marketing firm commented on this trend, saying, “The increasing expenses associated with customer acquisition are driving these platforms to intensify their marketing strategies to maintain and grow their user base.”
As quick commerce continues to evolve, companies are investing heavily in performance marketing to stay competitive and cater to the growing demand for rapid delivery services.
This shift highlights the importance of targeted marketing strategies in the increasingly digital marketplace. Quick commerce, driven by venture capital-funded discounts and reduced delivery costs, is thriving in India. K Ganesh, Founder & Partner at Growthstory.in, says, “The high population density and disorganized supply chain in urban areas make quick commerce a viable solution.” Quick commerce addresses challenges such as urban congestion and shifts in consumer behavior towards convenience, particularly for groceries and niche products.
Shiv Shivakumar, Operating Partner at Advent International, adds insights from the FMCG sector, highlighting technology’s crucial role in connecting brands with consumers.
Performance marketing drives customer targeting
He mentions the shift in consumer habits away from traditional kirana stores towards digital platforms, driven by the demand for convenience and smaller pantry sizes.
The rise of Direct-to-Consumer (D2C) brands has also been significant, with these brands capitalizing on niche markets within a fragmented landscape. However, D2C brands face challenges like high customer acquisition costs and low brand loyalty, fostering a more transactional marketplace compared to the brand loyalty seen in previous generations. Traditional branding is shifting towards shorter, digitally-focused campaigns, making brand building easier in the digital age.
The growing importance of private labels is noted, as diminishing brand loyalty allows store brands to compete on quality. The future of retail will require omnichannel strategies and seamless experiences across all platforms. This approach will be crucial for brands and retailers seeking to stay relevant and competitive in a rapidly changing market.
