Keeping up with the consumer
Q-commerce has enabled consumers to try new online categories because of its convenience thus increasing the share of wallet.
1. Q-commerce | Reaching the customer quickly
Q-commerce (short for “Quick Commerce”) is a market defined by very fast delivery (under two hours) from local shops, restaurants, and dark stores. The most common example of Q-commerce is online food delivery, but we are seeing many new segments come up as well such as grocery, pharmacy, gifts & flowers and courier services.
Q-commerce has enabled consumers to try new online categories because of its convenience thus increasing the share of wallet. Though this segment is currently driven by food delivery, we are seeing other sectors such as eGrocery grow at a considerable pace. As an example, Q-Commerce is already 40% of eGrocery market in KSA. Other categories such as pharmacy are limited by government policies on selling prescription medicine online.
2. C-commerce | Reaching the customer innovatively
C-commerce (short for “Conversational Commerce”) uses conversations while shopping virtually through mediums such as chats, live streaming and voice enabled devices. C-commerce enables consumers to interact with brands virtually but while retaining the interaction aspect of the physical world. Some emerging trends here are:
- Live streams where sellers use the live feature of social media applications to interact with their customers in real time, showcasing products and addressing their queries
- Chatbots where sellers leverage AI to automate responses to typical consumer queries leveraging social media platforms or their own websites
These activities build trust and credibility while keeping the consumer engaged. We see that awareness of c-commerce is high at 80%+ of internet population and its subsequent adoption potential is high in the Middle East. China is a leader in C-commerce with over 30% of its population watching live streams in 2020.
3. D2C | Reaching the customer directly
Last but not the least, we see the impending rise of D2C or “Direct to Consumer” channels. D2C enables stronger control over the brand, quicker product launches and also allows the brand to engage with the consumer to understand their preferences better.
Digital Natives have been at the forefront of creating D2C brands. There have already been unicorns in this space such as Warby Parker, Caspers, Dollar Shave Club, to name few. Large established brands such as PepsiCo and Nespresso are also taking the D2C route to reach customer directly.
Local D2C ecosystem is relatively nascent but already has seen traction. Huda Beauty is already a unicorn while Unilever is testing D2C in the UAE through its Unidukkan offering.