In this article, you will discover what Quick Commerce is, its origins and evolution, the advantages it offers companies, the technologies that have enabled its growth, as well as the challenges companies face in adopting this approach.
You'll also get a glimpse into the future of Quick Commerce, what the emerging trends are, and how businesses can successfully embrace this revolution.
Quick Commerce, also known as Q-Commerce or QC, is based on the concept of delivering a product as quickly as possible, generally in less than an hour. This phenomenon began with food delivery, which still represents the largest portion of the business.
This is a relatively new concept in the world of e-commerce and commerce in general.
This approach is closely related to the concept of "on-demand delivery", but with an even greater emphasis on speed and efficiency.
Therefore, Quick Commerce allows customers to order products, food or other services and receive them extremely quickly, often in less than an hour. But how do you get such an efficient service?
This speed is possible thanks to the intelligent use of technologies, the digitalisation of processes and the optimised management of logistics, topics which we will delve into further on.
In the meantime, let's see how this phenomenon began.
Quick Commerce has its roots in the exponential growth of ecommerce and home delivery in recent years. As consumer expectations for shorter delivery times increase, many companies have begun exploring ways to reduce wait times.
One of the precursors of Quick Commerce was the "dark kitchen" or "ghost kitchen" business model.
These kitchens worked without a physical restaurant, focusing exclusively on food preparation and home delivery.
This idea demonstrated that consumers are willing to pay a higher price to have food delivered directly to their home, obviously as long as the delivery is fast and the food has the same quality as if they were in a restaurant.
With home delivery apps like Uber Eats, Glovo or Deliveroo, the idea of having food and other products delivered to people’s houses has become increasingly popular. These platforms played a key role in the development of Quick Commerce, as they demonstrated with clear and transparent data that the demand for fast delivery was not only widespread, but also constantly increasing.
Quick Commerce has exploded over the past few years, attracting numerous companies to this rapidly growing sector.
Companies like Glovo, Rappi, Gorillas, Macai, and GoPuff are revolutionising the way people shop and obtain consumer goods.
This boom was fueled by a combination of factors. Firstly, the widespread reliance on smartphones and high-speed Internet connections paved the way for a revolution in the shopping process, based on the idea of quickly and intuitively ordering products through dedicated apps.
Secondly, the Covid-19 pandemic has accelerated the need for safe ways to shop and receive products without leaving the house.
And like many other technological revolutions that experienced a surge due to Covid-19, Quick Commerce also shows no signs of stopping, undeterred by the pandemic’s diminishing impact.
Quick Commerce offers plenty of advantages to companies that adopt it. Here are some of the main ones:
The success of Quick Commerce is directly connected to the integration of advanced technologies.
Some of the key technologies that support Quick Commerce include:
In the world of Quick Commerce, some platforms and applications stand out as industry leaders, offering a variety of services for businesses and consumers.
The main Quick Commerce apps currently in circulation are:
Logistics and digitalization are crucial aspects of Quick Commerce success.
In summary, logistics improvement requires optimised route planning, real-time tracking of shipments, and warehouse management. At the same time, digitalization helps improve visibility and control over these processes, allowing companies to save time and resources.
Let's find out more about the two pillars of Quick Commerce.
Logistics is the beating heart of Quick Commerce. Efficient logistics management is crucial to ensure that products are delivered timely and safely to customers.
Here are some key aspects of Quick Commerce logistics:
Digitalisation is closely related to logistics in Quick Commerce. Digitalisation refers to the use of digital technologies to automate and optimise business processes.
Here's how digitalisation is crucial for Quick Commerce:
The synergy between efficient logistics and advanced digitalisation is what allows Quick Commerce to work quickly and well.
Without a robust logistics system and an appropriate level of digitalisation, Q-commerce would not be able to guarantee the fast delivery of products to customers in such a short time.
Technology is the key element that enables companies to operate in this rapidly growing sector, meeting consumer expectations for fast and convenient delivery.
Although Quick Commerce offers significant advantages, companies must face several (unfortunately often unavoidable) challenges to be successful in this sector.
The main obstacles of Quick Commerce are:
Overcoming these obstacles requires a strategic approach and the ability to adapt to an ever-changing environment.
The Quick Commerce industry is highly competitive, with numerous companies trying to gain a share of the market. This competition can lead to a number of challenges, including:
Pricing pressure: To attract customers, companies are often forced to reduce prices or offer special promotions, which can negatively impact profit margins.
Battle for customer loyalty: Customer loyalty can be difficult to achieve, as consumers often choose Q-commerce services based on convenience and speed. This makes it even more important to provide high-quality service to retain customers.
Due to high operating costs, including complex logistics and driver management, many QC companies have thin profit margins. This means they must find ways to increase efficiency and reduce costs to remain competitive.
Economies of scale: Increasing delivery volume can help reduce unit costs, but this requires significant growth in operations.
Route optimization: Reducing operating costs through route optimization and efficient vehicle management can help improve profit margins.
Managing logistics for QC can be very complex and expensive. Some of the problems related to this complexity include:
Warehouse management: Maintaining well-organised and well-stocked warehouses can be expensive and requires sophisticated logistics to manage procurement and distribution.
Drivers and vehicles: Managing drivers and vehicles requires precise route planning, vehicle maintenance, and human resource management.
Fluctuating demand: Demand for products or services can vary significantly throughout the day or week, requiring dynamic resource management to avoid waste and inefficiencies.
Laws and regulations related to home delivery vary from location to location and may present additional obstacles for businesses. Some of the regulatory issues include:
Food safety regulations: Food delivery companies must comply with stringent food safety regulations, which can lead to additional costs and complexity.
Traffic and parking regulations: Traffic and parking laws can vary depending on the city, requiring ongoing compliance and dealing with possible fines.
Employment laws: The classification of drivers as independent contractors or employees can vary from location to location and can have significant implications on payrolls.
Quick Commerce customers often have very high expectations regarding the speed and efficiency of deliveries.
This puts pressure on companies to maintain high standards and ensure timely deliveries. Any delay or service problem can lead to a loss of customers.
With growing attention to the environment, companies using the Quick Commerce business model have to deal with the huge challenge of improving the sustainability of their operations.
Rapid delivery has a huge environmental impact also because it increases greenhouse gas emissions. Companies are trying to address this challenge by adopting electric vehicles, eco-friendly packaging solutions, and strategies to reduce the overall environmental impact of their operations.
Scalability in Quick Commerce is one of the main challenges of this business.
On the other hand, like all booming trends, rapid growth and managing a vast network of delivery operations is a challenge in itself.
The need to expand infrastructure, hire and train staff, and maintain quality of service as you grow can be difficult to manage.
Quick Commerce is an evolving sector that offers, as we have seen, many opportunities and just as many challenges.
Let's see some of the emerging trends in this business model.
The future of Quick Commerce is undoubtedly promising, but requires constant adaptation.
Companies must remain flexible, be able to adopt new technologies, maintain high standards of service, and demonstrate commitment to sustainability, as well as customer trust, in order to thrive in this industry.
If you want to successfully adopt Quick Commerce, there are some key tips to keep in mind:
In conclusion, Quick Commerce is revolutionising the world of commerce, offering a faster and more convenient shopping experience for consumers, as well as a series of benefits for businesses.
With the right mix of technology, logistics, and customer focus, you can capitalise on this growing trend to thrive in the future of instant commerce.