Quick Commerce – also referred to as rapid delivery – rocketed during the pandemic – no surprise when goods could be ordered in as little as 10 minutes without leaving the house – but in our view it’s not just a quick fad. The question is, what are the right business and partnership models for it to become financially sustainable and scale over the long term?
Although still significantly higher than before the COVID-19 pandemic, we have seen e-commerce penetration rates starting to tail off in recent months and this is already having an impact on the sector with user sessions and app downloads tapering off. There have been announcements in the press of staff cutbacks from ‘pure play’ rapid grocery businesses like Getir and Gorillas – a sign that they themselves are grappling with the future shape of the market. Inflation is at its highest level for decades, the cost-of-living crisis is worsening, and the unstable geo-political landscape is disrupting supply chains – making it not only more expensive but more uncertain for businesses. Users of rapid delivery services (e.g., groceries) will also be starting to feel the pinch and their purchasing decisions will likely become more cautious as a result. There’s no doubt that conditions have changed significantly since the beginning of the year and the market feels different now. We’re sure to see some fragmentation as a result – but this will create the opportunity for winners to emerge, too.
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