by Quick e-commerce, also known as quick commerce or 10-minute delivery, has seen a meteoric rise in the UK over the past year. This new model promises delivery of groceries and daily essentials within 10 minutes of ordering. Several startups have launched quick commerce platforms to tap into this growing.
Rise of On-Demand Economy
The on-demand economy has transformed consumer expectations in recent years. People now demand instant gratification and want everything at their fingertips with just a few taps on their phones. This rising expectation of immediacy and convenience has enabled the growth of platforms like Uber, Deliveroo, and Sheetz that promise hyper-fast delivery. Quick commerce startups are capitalizing on these changing consumer behaviors by offering truly instant delivery within 10 minutes. Their low-commitment and frictionless shopping model has captured the imagination of time-starved urban consumers.
Enabling Technology
Advances in technology have made 10-minute delivery at scale possible. Quick E-Commerce (Quick Commerce) players rely on dense micro-fulfillment centers located in high-demand areas to store thousands of stock keeping units (SKUs). Sophisticated warehouse management systems and analytics help optimize inventory levels at these centers. Powerful route planning algorithms coupled with lightweight electric vehicles enable delivery partners to optimize routes and reach consumers within the promised lead time. Drone and robotics technology are also being explored to automate parts of the delivery process further.
Pioneers of Quick Commerce
Getir was one of the first movers in the UK quick commerce. Launched in Istanbul in 2015, Getir now operates in over 20 cities across Europe. The company raised $550 million in funding last year and expanded aggressively in London. Gopuff followed suit and launched in the UK in 2021 after acquiring Fancy before rapidly onboarding multiple micro-fulfillment centers. Zapp also entered the with a £100 million funding raise and partnership with Circle K stores. All three players promise delivery from local hubs within 10 minutes and have scaled operations across major UK cities.
Rapid Scaling and Consolidation
Seeing the opportunity, several other startups including Dija, Flink, and Jiffy have also launched operations in the UK. Meanwhile, incumbents are fighting back – Amazon launched its Prime Now Express service in select cities, while Uber recently entered the space with 10-minute grocery delivery in London. This intense competition has led to rapid scaling, discounted promotions, and high cash burn rates as players fight for share. Early consolidation has also begun – Zapp recently acquired fellow 10-minute delivery player Stur in London as the evolves. Experts expect further M&A activity in the coming years as smaller startups struggle to compete.
Challenges and Controversies
While quick commerce fills an important need for urban dwellers, it has also faced criticisms around sustainability, labor practices, and unit economics. The environment impact of thousands of small electric vehicles crisscrossing cities to deliver single orders is unclear. There are also concerns around worker welfare, with some alleging intense workload, lack of benefits, and algorithmic monitoring of delivery partners. Unit economics remain challenging at scale given high real estate costs, wage inflation, and rising energy prices. Fake and dummy orders have also been used by some startups to demonstrate higher volumes, sparking debates around unethical practices. Regulators are watching the space closely as the challenges mount.
Despite current issues, most experts agree quick commerce is here to stay. Consumer demand for instant gratification and delivery speeds will only rise with increasing digitization and urbanization. While 10-minute windows may extend to 30 minutes as operations mature, the hyperlocal delivery model enables new monetization opportunities through ads, commissions, and subscriptions over time. Integration with existing grocery chains and convenience stores can also help startups access cheaper land and fulfillment space. With several billion-dollar funds now active in Europe, more funds will flow into consolidation and innovations around sustainability. Quick commerce is undoubtedly transforming the retail paradigm in the UK and other major s worldwide.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
