Brief note on Q-Commerce

On 19/08/2023 07:05:37

Q-commerce is booming - companies like Jokr, Weezy, Getir, and Flink are cropping up at great speed across the globe, a trend undoubtedly influenced by Covid-19 lockdowns and the reduced accessibility to everyday items and household goods.

But what is it, why is it so popular, and what does its rise mean for consumers, cities, and traditional operators? 

What is Q-Commerce?

Q-commerce vs. e-commerce

‘E-commerce’ refers to the online purchase, or sale, of a good or service. 

Alongside the democratization of the internet, came the marvel of online shopping. Customers could order a product digitally, be that an electronic gadget or apparel, and receive it in the next 3-5 days - a bracket of time considered to be acceptably quick. 

Q-Commerce meaning

Q-commerce (‘quick commerce’) - sometimes used interchangeably with ‘on-demand delivery’ and ‘e-grocery’ - is e-commerce in a new, faster form. It combines the merits of traditional e-commerce with innovations in last-mile delivery. The premise is largely the same, with the speed of delivery being the main differentiator. Delivery is not in days but minutes - 30 or less, to be competitive.  This has in turn expanded the breadth of what individuals can order, with perishable goods - like groceries - being a large niche Q-commerce companies speak to. It tends to focus on the micro - smaller quantities of fewer goods. For example, a missing ingredient is urgently needed for a recipe that’s already in motion. 

What are the benefits of Quick Commerce?

4 ways in which q-commerce stands apart from traditional retailers to customers are… 

1. Speed

Compared to a conventional retail outlet, q-commerce companies are able to get goods to customers in a fraction of the time.  This is due to the aforementioned hyper-local micro-fulfillment centers (‘dark stores’) dotted around densely populated stretches of cities and positioned in close proximity to those making orders - usually no more than 3km away.

 

This means orders can be fulfilled ~25% faster than traditional in-store fulfillment.  With every inch of their floor plan optimized for efficiency, dark stores don’t need to sacrifice precious square footage to accommodate shoppers browsing aisles. Once orders are ready, couriers are able to easily zip back and forth between dark stores and customers’ locations. 

2. Guaranteed availability of curated, relevant products

It isn’t just quicker delivery on offer, but items are more likely to be available, due to investment in AI and technologies that monitor demand and adjust inventory in real time. Intelligent software identifies demand patterns, and companies can respond by ensuring items are supplied accordingly.  They also make use of mobile technologies to keep their legion of couriers - who play a pivotal role as the face of the brand - informed, upskilled, and providing a high level of service to customers. 

3. 24-hour operation

Dark stores can operate 24 hours a day, 365 days a year - they are not limited to set daily opening hours like brick-and-mortar retailers are.

This round-the-clock availability resonates with the ‘always-on’ culture smartphone technology has given rise to - people are awake at all hours with smartphones within arm’s length at all times. 

4. Ease

If you could choose between stopping your current activity, rummaging around for keys and cards, tying laces, walking a block or two, then around the store in search of your items, being unable to locate them so engaging with a staff member for help, queuing, paying, bagging items, then walking back home, or remaining exactly where you are, opening an app and pressing a few buttons - which would you opt for?

Ease is the fundamental - and very enticing - value proposition that Q-commerce companies offer time-scarce customers.

“Consumers now want and expect more items than ever to be delivered to their doorstep...It is no longer a case of waiting 24-48 hours for delivery. Rather, the expectation for this is now a matter of minutes." - Daniel Alonso, Global Director of q-commerce, Glovo

The bigger, less visible, difference happens on the backend - in the way that q-commerce operates behind the scenes.  Not all have the same business model, but many use ‘dark stores’ - strategically located warehouses - to ensure a quick turnaround from order to doorstep. These can be anywhere between 3229 and 7500 sq ft (300-700 sqm) in size and tend to stock upwards of 1,000 unique products.  Many also crowdsource labor, equipping them with a fleet of individuals ready to spring into action at any moment. 

The combination of these factors, plus others (including adoption of the latest software, and the layout of dark stores themselves) provides them with the ultimate agility and flexibility required to adeptly respond to customer demand, round the clock.

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