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Mar, 2021     

Q-commerce | The Demand For Speed

Q-commerce is a market defined by very fast delivery from local shops, restaurants, and dark stores. It is usually characterized by under 2-hour delivery.


1. What is Q-Commerce?

Q-commerce is a market defined by very fast delivery from local shops, restaurants, and dark stores. It is usually characterized by under 2-hour delivery. 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.

2. The Impact of Q-Commerce

The most notable impact of Q-commerce is that it has enabled consumers to try new online categories. This segment has been characterized by impulse purchases such as food delivery and buying small ticket grocery items. But given our new lifestyles in the past year, there was a demand for quick delivery of items without stepping out of the house. As a result, new categories such as pharmacy, gifts and flowers grew as well. Currently, food delivery accounts for majority of the Q-commerce market. We do expect the market to grow at a considerable pace, driven by food delivery and increasingly online grocery. Other categories such as pharmacy are limited by government policies on selling prescription medicine online.

3. Future Drivers of Q-Commerce

The growth of Q-commerce was enabled by the newly built hyperlocal capabilities of players, so it is not surprising that many food delivery players introduced these services as well. Competition is bound to increase, and players are already transforming their business models to capture this market. Challenges arise in low margin categories due to the variances in delivery fees and longer delivery times. Several players are shifting to a cloud model from where they can fulfil orders of multiple categories thus improving unit economics and reducing delivery times.