Quick commerce platforms tap private labels to bolster margins, loyalty

While top brands help build categories and draw customers in, platforms are increasingly substituting those same brands with private labels that offer better control over pricing, packaging, and inventory
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KARUNAKARAN M

Quick commerce players are increasingly embracing private labels to boost margins, fill assortment gaps, and build deeper consumer trust. With established brands delivering wafer-thin margins and price-sensitive consumers demanding quality at speed, private labels are emerging as a strategic lever in the fiercely competitive space.

“Private labels are a lot more profitable than other brands. While FMCG margins are razor-thin, private labels offer gross margins of 40–50 per cent ,” said Anand Ramanathan, partner, consumer products and retail sector leader, Deloitte India. “For many modern trade retailers, private labels contribute 25–40 per cent to the top line, but nearly 80 per cent to profitability,” he added.

Margins over marketing

Retailers such as BigBasket—now deep into their quick commerce pivot—see private labels as a path to long-term sustainability. While top brands help build categories and draw customers in, platforms are increasingly substituting those same brands with private labels that offer better control over pricing, packaging, and inventory.

“We do not start private labels with the objective of higher margins,” Seshu Kumar Tirumala, Chief Buying and Merchandising Officer, BigBasket. “We look to solve unfulfilled customer needs. But once the product is accepted, we do enjoy slightly higher and more predictable margins,” he added.

Staples to Speciality

BigBasket currently sees 35–40 per cent of its total sales coming from private labels, with much higher penetration in staples, meats, and fruits & vegetables. Its flagship brands—BB Royal, BB Royal Organic, Fresho, Tasty’s, BB Home, and Indy Secrets—cater to diverse segments, from grains and dairy to health snacks, household supplies, and traditional condiments.

In the meat and seafood category alone, private labels contribute nearly 60 per cent . For quick commerce, such categories are not necessarily cash cows but footfall drivers. “Like fruits and vegetables, meats bring frequency and habit. They’re loss leaders—but they drive traffic, which is key in Q-commerce,” added Ramanathan.

Zepto is also scaling its private-label portfolio in staples. Last year, it launched Daily Good, offering, oils, dals, millets and dried fruits.

Swiggy Instamart has ramped up its Supreme Harvest label, which spans pulses, oils, spices, flour, and dry fruits.

While companies like Swiggy and Zomato have been slower to adopt private labels in Q-commerce, experts believe they will follow suit. “They’ve already launched private kitchens in food delivery. They’ll eventually extend that model into Q-commerce—it’s inevitable,” said Ramanathan

“Private labels are always more profitable—maybe anything upwards of 2x. If you make 20 per cent on an FMCG product, you will make 40 per cent on private labels,” he added.

Quick commerce players are now eyeing non-traditional segments like event-driven merchandise, personal care, and gifting. BigBasket is expanding into festive categories such as Holi colours and water guns under BB Home, and plans to deepen its private label presence in dairy and beauty, among others.

However, private label shares will remain capped near 40–45 per cent , to ensure balance with national brands. “We need both—brands play a role. But we are growing our private label portfolio every year by a couple of percentage points,” said Seshu.

Published on May 8, 2025