by What is Quick Commerce?
The rapid growth of e-commerce over the past few years has led to the emergence of a new model known as “quick commerce”. Quick commerce, also referred to as Q-commerce, involves delivering groceries and essential goods within an hour or less after ordering. This dramatic shortening of delivery windows is made possible through hyperlocal warehouses known as dark stores located within cities. These small warehouses are stocked with everyday items that are picked, packed and delivered quickly by fleets of dedicated delivery agents.
Quick commerce platforms like Gorillas, Getir, JOKR and Dija promise delivery in 10-30 minutes, challenging the standard 2-3 hour delivery windows offered by traditional e-grocers and meal kit companies. Their value proposition of ultra-fast delivery has received immense popularity among urban customers who need something urgently but don’t have time for regular grocery shopping.
The Pandemic Effect
The pandemic acted as a catalyst for Quick E-commerceadoption globally. With lockdowns limiting physical shopping, people turned en masse to online grocery delivery solutions, creating a surge in demand. Quick commerce startups were uniquely positioned to meet this need for speed. Those already operating before COVID found their business models validated as delivery times slowed down across the industry due to labour constraints. This created a huge tailwind for startups focused solely on hyperlocal deliveries.
Q-commerce today has expanded beyond groceries to include a wide assortment of everyday essential items like medicines, home and personal care goods, electronics, toys and stationery. Their selection, while compact, is carefully curated based on consumer purchase patterns and local demand. This assortment along with ultra-fast fulfillment has ensured they remain the preferred option for emergency or last-minute orders.
The Global Quick E-Commerce (Quick Commerce) Landscape
Quick commerce startups today have a significant presence across major markets worldwide. Europe is one of the leaders in quick commerce adoption with regional giants like Gorillas, Getir and JOKR dominating the landscape. Spain in particular has emerged as a hotspot of activity with startups like Glovo and Dija competing aggressively. North America is also witnessing rapid growth with players like Gopuff, Jiffy and Fridge No More cementing their hold.
In Asia, markets like India and Southeast Asia are witnessing intense interest from both regional and global startups. Local giants like Swiggy Instamart and Blinkit (formerly Zomato’s quick commerce division) are sparring with international entrants like Getir and Gorillas for dominance. Even markets like the Middle East and Latin America are witnessing growing quick commerce adoption among urban populations. Overall, industry analysts project quick commerce across the world will be worth over $25 billion by 2025.
Funding Frenzy & Growth Issues
Quick commerce’s blistering growth globally has helped startups raise significant funding rounds to fuel expansion. Gorillas, Getir and JOKR have all attracted investment upwards of $1 billion while Glovo raised over $800 million and Fridge No More hit $200 million. However, the twin challenges of maintaining a dense network of dark stores to ensure delivery speed while keeping costs low require heavy capital infusion. This has led some companies to sacrifice ultra-fast delivery promises for wider coverage and higher order values.
Market saturation is another threat as more players vie for consumer attention and spend in key cities. Unit economics become difficult as customer acquisition costs rise with increasing competition. Labour issues around pay and working conditions also plague many startups. Overall, profitability remains elusive for most as they prioritize growth over margins. Those able to adapt business models, cement loyal customer bases and establish operational efficiencies will have an edge in the coming years of consolidation.
The Future of Quick E-Commerce (Quick Commerce)
While challenges persist, quick commerce is undoubtedly here to stay given the convenience it offers busy customers. Even as startups weather current growth and profitability storms, some fundamental factors point to strong long term potential:
– E-grocery habit formation during the pandemic is accelerating demand beyond metros to smaller cities. This vastly expands quick commerce addressable markets.
– Younger demographics comfortable with on-demand services will drive ongoing preference for ultra-fast deliveries as they become the bulk of spends.
– Convergence with restaurant tech and IoT allows bundling additional services like prepared meals, fresh produce and hyperlocal delivery of other items. This improves unit economics.
– Strategic partnerships between quick commerce startups and traditional retailers can leverage each other’s strengths for deeper market penetration.
– Emerging technologies like autonomous vehicles and drones hold promise to revolutionize last-mile delivery networks and achieve profitability.
While the quick commerce sector faces hurdles, its ability to continuously innovate business models and adapt to shifting customer wants will determine winners. With demand only growing, those who can achieve scale with sustainable economics are poised for massive success in the on-demand economy. Ultra-fast fulfillment of daily needs will increasingly become the new normal across global cities.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals.