by The rising popularity of ultra-fast grocery delivery start-ups around the world is reshaping not just e-commerce but our daily lives. Quick commerce businesses promise delivery of essential items within 10-30 minutes, challenging the status quo of shopping and our perception of time.
The Foundations of Quick Commerce Quick commerce relies on hyperlocal warehouses called dark stores situated in dense urban areas. These warehouses primarily stock fast-moving consumer goods ranging from daily grocery items to consumables to pharmaceutical products. They utilize big data, AI and collaborative robots for automation to assemble orders within minutes from the available inventory. This allows scaling operations rapidly to serve a small and hyperlocal catchment within a few kilometer radius.
The focus on speed has made last-mile delivery the critical bottleneck that quick commerce players target heavily through innovative fleet management. Electric vehicles, collaboration with delivery partners, investment in tech optimization and incentivizing delivery staff help achieve delivery in as little as 10 minutes compared to hours taken by regular online grocery platforms. However, maintaining profitability remains challenging given the high costs involved.
India – A Hotbed of Innovation
The Quick E-commerce (quick commerce) sector has found fertile ground in India where mobile-first consumers live in densely populated cities while traditional grocery stores still dominate. Indian start-ups led the way in pioneering the 10-minutes delivery model. Companies like Blinkit (formerly Zomato), Dunzo and Swiggy Instamart have gained popularity with young urban professionals and nuclear families seeking convenience. Securing funding at sky-high valuations in a short span, quick commerce is gaining mainstream attention in India.
While competition is intense, synergies and partnerships across players have also emerged. For instance, Blinkit now leverages Zomato’s existing food delivery network, allowing expansion into new areas with spare capacity. There is increasing preference among offline retailers to adopt the platform-based ‘dark store’ model to serve online demand and extend their catchment areas. The success of Indian start-ups is setting the stage for other Asian countries and Africa to explore this rapidly growing e-commerce model.
Quick Delivery Encroaches Online Grocery Space
Initially seen as complementary to well-established online grocery platforms, quick commerce is now directly challenging them. Their delivery promise of 10-30 minutes beats online grocery’s average 2-hour minimum delivery window. Targeting convenience-driven customers, quick commerce especially appeals to unplanned, top-up and urgent shopping needs that other e-grocers cannot fulfill. This attracts a wider set of product categories and occasions compared to traditional online grocery lists planned days in advance.
However, quick e-commerce (quick commerce) also faces issues with unsustainable unit economics and profitability as the costs of inventory, warehouses and last-mile delivery are high. Established players like Bigbasket and Grofers that already have logistics fleets are implementing quick delivery capabilities via hyperlocal partnerships. The incumbents still hold advantages of brand recognition, trust, variety and bulk buys that quick commerce misses out on. Overall, the sector is compelling both players and consumers to rethink the grocery shopping experience forever in favor of immediacy and speed.
The “Now Economy” Goes Global
Quick commerce and delivery are increasingly global ideas feeding consumer habits. Instacart brought the model to the United States with its hyperlocal warehouses and partnerships with retailers like Walmart and Costco. Gorillas quickly launched in 20 cities across Germany with its 10-minute delivery promise competing against Amazon Fresh. Turkey’s Getir raised over $1 billion, expanding beyond its home market to the United Kingdom and Netherlands. Latin America also saw quick commerce booms in Colombia and Brazil.
However, players must tailor their approach according to local needs and regulatory environments. For instance, in China where Meituan and Alibaba are dominant, community groups known as “little red books” have taken the quick commerce mantle by crowdsourcing hyperlocal deliveries within 15 minutes. The Middle East market is unique with Grab and Careem experimenting alongside existing grocery chains. Quick commerce clearly resonates universally wherever well-to-do urban populations prize speed and ease in fulfilling daily tasks. Still, sustainability remains a litmus test each player must surmount to claim leadership.
The Future of Quick E-Commerce (Quick Commerce)
Analysts project quick commerce becoming a $5 billion industry in India alone by 2025. Global industry figures could touch $25 billion in the same time span despite pandemic uncertainties. Early signs show the concept graduating beyond traditional daily essentials, witnessing spikes during events, festivals or natural calamities when communities rely on speed of delivery. Quick commerce seems set to redefine the “now” economy and our relationship with time, space and shopping needs in a post-COVID world that demands immediacy, contactless experience and maximum convenience woven seamlessly into our daily busy lives.
Though challenges of profitability and scale remain, nimble on-demand start-ups will keep pushing delivery times lower while forging synergies across supply chain players. Meanwhile, consolidation seems inevitable as larger e-commerce and logistics firms acquire emerging winners, blurring industry boundaries. If quick commerce can resolve sustainability issues, it may emerge as a long-term disruptive force rewriting retailing as we know it while bringing us increased accessibility and democraticizing consumer trends across both developing and developed nations alike. Only time may tell how far and how fast this new “now” era of instant gratification progresses to shape our future.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
