Has it ever happened that you scrolled YouTube and found a delicious dish to try preparing? But to your despair, you cannot see all the ingredients; to get them, you must make extra efforts to go to the shop! Well, this is the story of many people. This led to the quick commerce revolution in India. As the e-commerce industry is changing rapidly, quick commerce has become one of the emerging e-commerce trends. Quick shopping or fast commerce is the result of shifting consumer behaviour. Today, consumers are looking for a faster commerce experience to save time. In this blog, we are going to see how quick commerce in India is revolutionizing the retail territory and paving the way for ultra-fast delivery.
What is Quick Commerce?
Quick Commerce or quick shopping is a new India business model that promises to deliver products in the least amount of time, typically under 30 minutes. It is gaining popularity in urban areas because people have a fast-paced life and, therefore, need more convenience. Many quick commerce companies have entered this domain and are doing fairly well. Blinkit & Zepto are the prime examples. Quick commerce platform has a lot of opportunities. This is why even the big e-commerce marketplaces like Flipkart and Amazon have entered with Flipkart Minutes and Amazon Fresh.
Categorizing Quick Commerce in India Business Models
There are basically 5 business models that quick commerce in India follows:
Inventory Model
As the name suggests, products are purchased from authorized vendors under this business model. These products are even stored in warehouses often owned by quick commerce companies. This is similar to the regular e-commerce marketplace.
Hyper-Local Model
This model is similar to the inventory model, but in this, the quick commerce companies use local vendors that are close to the customer's address. Hence, this model offers faster order delivery.
Multi-Vendor Platform Model
You are again familiar with this concept. It is like having various warehouses that multiple vendors manage. This helps cater to various customers in different locations efficiently.
Revenue Channels: Online Grocery Model
This model is more like e-commerce marketplaces where the sellers list their products on the platform. The sellers have to pay a certain amount, such as the commission. Some platforms also ask for an additional fee per order.
Omni-Channel Model
Customers can choose any method to purchase with this model. They can visit websites, mobile apps, online platforms, distribution and storage facilities, and physical storefronts. After a physical inspection, customers can make purchases online or in-store.
Quick Commerce vs E-Commerce: Decoding the Differences
Generally, people consider both quick commerce and e-commerce to be the same. But this is not the case. Both these models are different in the following ways:
- Need-Based: Urban demographics mostly use quick commerce when they need products instantly. E-commerce is used by people all over the globe to get products they do not need instantly and can wait for the product for at least a day or more.
- Order Delivery Speed: Fast commerce delivers products within minutes as the consumer urgently orders them. On the other hand, e-commerce typically takes at least a few hours or even days, depending on the consumer's delivery location.
- Operational Model: Q-commerce has 5 business models that manage inventory differently. They mostly depend heavily on dark stores to reduce delivery times of order fulfillment.
- Product Type: Fast commerce delivers daily need-based products like fruits, vegetables, confectionary items, or even personal care products along with medicines. E-commerce, however, provides a wide range of products. Consumers can get both daily need-based essentials and bigger products like electronic gadgets or apparel.
Dark Stores: Warehouses in Quick Commerce
They are similar to warehouses in the e-commerce marketplace as they store inventory for the quick commerce marketplaces. They are also called dotcom centers and ghost stores. Dark stores are the backbone of quick commerce in India as they help deliver products in minutes to the consumer. Consumers get a faster commerce experience of quick shopping because of dark stores. The more the number of dark stores, the better the delivery speed. Blinkit manages 1007 ghost stores, which is the highest among the rest of the quick commerce companies.
Speed Breakers in Quick Commerce Journey
Quick commerce is fast, but it also faces challenges that slow down its growth. If you are looking forward to taking a step forward, here are the challenges you must consider before stepping in:
Tough Competition
Even though quick commerce in India is new, there are a lot of competitors. Even the e-commerce giants like Amazon and Flipkart have entered the market. So, be ready to thrive in the crowded marketplace of quick commerce.
Disruptions in Supply Chain
The order demands in quick commerce are not consistent. It keeps on fluctuating, and hence, it affects the supply chain many times. This even impacts order fulfillment and may increase the delivery time.
Sky-High Operational Costs
The dark stores require huge investments, which causes high operational costs. Even if quick commerce companies do not own them, they have to invest in factors like staffing, utilities, and rent.
The Logistics Issues
Since quick commerce needs to deliver swiftly in a matter of minutes, managing the logistics is a big challenge. The quality of order management relies mostly on timely delivery, which can be improved only if the logistics are efficient.
Meeting the Customer Expectations
A consumer shifts to quick shopping because it want the product delivered urgently without any extra physical effort. Hence, efficiency is narrowed down to one factor - fast delivery in minutes. Here, the scope to improve is quite less; therefore, meeting the consumers' expectations is tough.
Superb Strategies to Accelerate Quick Commerce
1. Explore the Trail of Technology
The path of technology has many solutions that help you accelerate your quick commerce journey. Since quick commerce is really quick and all the operations have to be done in a very short period of time, it becomes essential to rely on technology. Faster delivery can be done if inventory management and route mapping are done efficiently. Technologies like AI and machine learning help quick commerce in many ways like real-time order tracking and order analytics for better order fulfillment. Hence, technology helps quick commerce in the following:
- Real-Time Inventory Management
- Forecasting Demand through Data Analytics
- Delivery Order Routes through AI-powered Algorithms
2. Strategize Warehousing with Dark Stores
Dark stores play an important role in minimizing the delivery time of the orders. Therefore, the dark stores must be close to the high order or high-demand areas. Hence, it is crucial to strategize the location of dark stores to minimize the risk of late delivery.
3. Scalable Logistics Solutions
The demand in quick commerce fluctuates a lot. This is a big challenge for all the quick commerce companies. So it is essential that the logistics must be flexible and scalable. Only flexible logistics strategies can handle unexpected demand surges.
4. Partners with Benefits
Logistics is a big challenge in quick commerce, so partnering with logistics providers can be a win-win situation for both parties. Using a collaborative approach with all the stakeholders will certainly ensure efficient fulfillment. Quick commerce is all about time. Hence, focusing on building partnerships with the local retailers and suppliers, can be a great strategy.
5. Customer-Centric Approach
For any e-commerce to grow, it is important to understand and help your customers. They may need assistance at any stage of order fulfillment. Therefore, there have to be clear communication channels that maintain transparency and are available 24/7. If the overall customer experience is good, it would be easy to maintain customer satisfaction and retain them for a longer time.
Can Quick Commerce Make a Rapid Shift in India?
Quick Commerce is a booming industry. It caters to the requirements of the urban population and is in high demand. Also, if we see it from the perspective of India, quick commerce in India has a bright future ahead. As the cities continue to grow, the demand for quick shopping will also increase. This shift in the e-commerce industry has some e-commerce challenges to face. Hence, it is not going to be a cakewalk for those who want to enter into quick commerce. However, it would be interesting to see how quick commerce in India would reshape the retail industry.
