The success of quick commerce (QC) enterprises like Zomato Ltd (Blinkit), Zepto, and Swiggy Instamart is dependent on reducing layers in the supply chain and improving channel efficiency to offset delivery costs. Up to now, leading FMCG players such as Hindustan Unilever Ltd (HUL), Nestle India Ltd, Britannia Industries Ltd, Dabur India, Marico, Emami, and Godrej Consumer have deep urban and rural distribution networks, which provide a competitive advantage by discouraging new entrants in a category with a dominant leader.

However, such staples marketers face hazards when their distribution advantage erodes; Indonesia is one example.

"We observe that while the market share of local grocers in Indonesia dropped with the fast rise of mini-marts, which allowed for increasing contribution, dominating companies such as Unilever Indonesia saw their market share fall dramatically. In India, we might see a similar trend as kiranas lose market share to rapid commerce and contemporary retail," CLSA wrote in a note.

CLSA stated that fast commerce is altering India's retail supply chain by flattening distribution, offering new businesses better exposure and price competition.

"As Blinkit's parent company, Zomato will be the biggest winner in the listed market, while Marico and Hindustan Unilever face significant risks as their distribution advantage erodes. CLSA forecasts that Blinkit would generate positive adjusted Ebitda and net profit by FY25, providing up to 34% of Zomato's FY26 EPS.

Modern merchants often purchase items from staple firms at a 22-25 percent discount to the maximum retail price (MRP). However, successful retailers, such as Avenue Supermarts Ltd (DMart), may operate with lower 14-15 percent gross margins, allowing them to pass on discounts to customers and increase market share.

In the general commerce channel, the different sections of the value chain unite to take 19. Margins account for 33% of the MRP. However, because these margins are shared by numerous companies, CLSA stated that undercutting is restricted.

"As a result, the consumer firms' maximum retail price is better protected, giving them more pricing power. While rapid commerce is now margin accretive for consumer firms with a 20-22% discount, they, too, have the capacity to pass savings on to consumers, essentially removing some price power from FMCG companies," CLSA stated.