• FIC Hansraj

Rise of Q-Commerce

A long time back, Domino’s Pizza launched an interesting market strategy “30 mins delivery or Pizza free” that acted as a plan which took the food chain industry by storm. People were astonished by the fact that a food brand can deliver food to their doorstep in 30 mins. This strategy facilitated Dominos to attract large traffic to its brand thereby fetching a lot of revenue. This concept which was once used as a USP by a restaurant chain has now emerged as a whole new segment for retail commerce, as e-commerce brands consistently look for ways to cut delivery times.


Rise in Q-Commerce | FIC Hansraj Refined
Rise in Q-Commerce

Consumers have now shifted from self-service stores like Walmart to online delivery stores like Amazon and Flipkart for the quick delivery of their products.


With rising urbanisation, the number of mini households in every city is increasing. People now prefer to order things in small quantities rather than purchasing items in larger quantities at a discounted rate. And with the rising demand for delivery of products in small quantities and the changing mindset of people, we have come to where we are today: ready to step into the era of quick commerce.


But, how quick is quick commerce?


In recent times, quick commerce delivers more convenience to the customers with its curated selection of products, instant and doorstep delivery. Unlike traditional e-Grocers, Quick Commerce platforms have simple UI and Instant delivery. This helps to cut down the inconvenience caused by offline transactions due to poor transport and unavailability of selection.


All these factors combine together to make q-commerce the new talk of the town and expand its reach through geographies and segments. It has evolved as one of e-commerce’s most in-demand verticals. The pandemic seems to have accelerated the pace of these platforms racing to adopt the hyperlocal delivery format. In recent times, as consumers found themselves homebound due to Covid lockdowns and restrictions, they took to online shopping like never before.


According to a report by McKinsey, within the £2 trillion European grocery market, online grocery shopping grew 55 per cent from 2020. India has seen an increase of e-retail groceries of over 150% from 2019 to 2020. Reliance Retail acquired a 25.8% stake in the quick commerce delivery firm Dunzo, which will enable Reliance to expand and create a synergy of its retail market with last-mile connectivity. TATA Group had also acquired a majority stake in the online grocer Big Basket back in 2020. Swiggy and Zomato have also vigorously invested in Instamart and Grofers, their Q Commerce service model for online grocery. Vendors in this space are continuously improving and adopting different logistics and warehousing strategies to secure faster deliveries. The frenzy in this market revolves around improving the last mile logistics which will play an important role in its growth. Increasing competition and investment in this sector will create a new era for logistics in the country.


A little under a decade ago, food delivery was all about pizza and Chinese. Today, food delivery has become a $150 billion market, having doubled in the COVID pandemic. Delivery became the lifeline for the restaurant industry during the pandemic with lockdowns and physical restrictions giving an enormous boost. Though delivery is scale driven and a cost-intensive model with low margins, there have been significant investments in the last two years. IPOs of Deliveroo and Zomato show the excitement yet uncertainty in this space.


Today, the factors for boosting business have drastically changed. The businesses that are able to understand consumer behaviours and provide the quickest services will be able to survive and win the battle. Q-commerce, a subset of e-commerce, is here to stay.


References:

The National News

McKinsey


Author: Lavina Garodia

Illustration by: Nikita Koya & Ramya Sehgal