by The Evolution of Online Shopping
Online shopping has grown tremendously over the past two decades, becoming a staple of modern life for consumers around the world. What started as a way to shop from the comfort of home for niche or hard-to-find products has evolved into the primary shopping method for many. Major online retailers like Amazon revolutionized expectations around delivery, often promising two-day shipping or same-day delivery in major metro areas. However, the hunger for even quicker fulfillment has led to the rise of a new genre of e-commerce—quick commerce.
The Quick Commerce Model
Quick E-commerce refers to delivering goods to customers within an hour or less of ordering. Pioneered by companies like Gorillas and Jokr, the model is optimized for ultra-fast delivery by locating micro-fulfillment centers in dense urban areas. These “dark stores” act as mini-warehouses stocked with grocery and convenience items found in neighborhood corner shops. Customers can place orders via a mobile app for delivery by bike or other small vehicles within 10-15 minutes on average.
The focus on hyperlocal micro-warehouses allows for shorter delivery distances compared to traditional centralized fulfillment centers. Streamlined in-app experiences and reliance on gig workers for deliveries further enables rapid order processing and dispatch. Quick commerce startups also leverage data science and predictive analytics to optimize localized product assortments based on purchase patterns in specific neighborhoods. This helps minimize order fulfillment times and maximize the chances of having requested items in stock.
A Booming Global Opportunity
Quick e-commerce (quick commerce) startups have raised billions in venture capital funding in recent years, highlighting investor belief in the massive potential of the category globally. Market research projects the global quick commerce industry will grow to over $100 billion by 2025. Europe and Asia in particular have seen a rapid proliferation of 10-minute delivery startups, capitalizing on dense urban populations with high smartphone usage.
While still in its early stages, quick commerce is fast becoming mainstream in major world cities. Startups like Gorillas, Getir, Jokr and Dija operate in over 50 cities across 10+ countries between Europe, Middle East and Asia. Grocery and convenience items account for the bulk of quick commerce sales currently, though some companies are expanding their assortments to include cooked meals, flowers, electronics and more. Investments are also facilitating geographic expansion as startups race to capture market share globally.
Challenges to Overcome
For all the promise, quick commerce also presents several challenges that startups will need to overcome for long term success and sustainability. High operating costs associated with maintaining micro-warehouses, retaining flexible labor forces and enabling 10-minute delivery can put pressure on profitability. There are also concerns around the environmental impact of rapidly increasing the number of small delivery vehicles on city streets.
Worker welfare is another issue as many couriers rely on gig employment with few formal protections. Highburn rates and reliance on unsustainable venture capital also raise questions around the viability of business models once subsidies dry up. Startups will need to innovate on supply chain management, cut delivery times even further and consolidate operations to achieve economies of scale. Adopting electric vehicles and bicycles can help with green credentials but may drive up costs.
The Future is Now
On the customer side, demand is surging as more people adopt quick commerce for daily needs. Younger demographics comfortable with on-demand delivery are driving much of the early growth. If startups can get unit economics under control and provide consistently reliable experiences, many predict online grocery and daily goods shopping will permanently shift to the 10-minute standard in the coming years.
Quick e-commerce (quick commerce) up new opportunities by getting products to customers faster than ever before imagined. While consolidation may be inevitable as the market matures, the global demand signals a bright future for those startups that can sustainably scale their hyperlocal operations across countries. Mastering ultra-fast fulfillment could give leaders in this new e-commerce genre a big first-mover advantage as online shopping evolves towards instant gratification.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
