Quick commerce – or speed commerce where deliveries are made under an hour of placing orders – is fast gaining currency within the e-commerce sector in the Middle East and North Africa (MENA) market, and is projected to reach a market share of seven percent of the $30 billion estimated e-tail market in the region this year, according to new research.
Quick commerce – q-commerce as it is popularly known – accounted for a paltry one percent market share in 2018.
Vast diversification of the delivery baskets of hyperlocal delivery players, and rising patterns of top-up and unplanned purchases among neighbourhood online shoppers, are stoking the surge of q-commerce in the MENA region, which is considered emerging as a more mature market for this segment compared to India and Southeast Asia, experts said.
The rising trend is attracting several products across sectors such as electronics, fashion, home and furniture, books and newspapers, toys, gifts and flowers.
“Historically, e-commerce shoppers were buying from online channels for the stock-up or top-up behavioural trait as delivery typically took two-three days at least. Over the past two years, with e-grocery becoming huge on e-commerce platforms, instant delivery service capabilities have been strengthened by most platforms, leading to the rise of q-commerce in the MENA region,” the latest research report by RedSeer Consulting, a specialised global consultancy for online services, said.
According to RedSeer, the q-commerce segment is expected to reach double digit market share by 2025.
Quick commerce targets top-up and unplanned purchases, which account for the majority of purchase behaviour of key online shopper cohorts, the report said.
It also listed on-demand consumption, instant and doorstep delivery, discounts and offers and assortment across categories and fill rate as the major value propositions of q-commerce, attracting both e-commerce companies and consumers equally to this segment.
Convenience-seekers, young generation new households and mid-to-high income cohorts are identified as the target groups for q-commerce, the report said.
“The pandemic-induced behavioural changes of consumers, coupled with the convenience of speedy delivery of products that have unexpectedly ran out or are immediately needed, is sure to drive further growth of this segment in the MENA region going forward,” Sandeep Ganediwalla, Dubai-based managing partner of RedSeer Consulting, told Arabian Business.
The market study pointed out that hyperlocal players in the region and beyond have diversified offerings evolving from food delivery to grocery, pharma and personal care categories in recent years.
“Fast delivery and convenience are strong decision drivers for mid-to-high income cohorts in tier 1 and 2 cities. These consumer cohorts form the majority of online shoppers, hence the q-commerce segment is picking up rapidly across MENA and other markets,” the report said.
The q-commerce segment in the MENA region is currently led by four types of players – traditional e-tailing horizontals such as Noon and AZ; specialist e-grocery players like Instashop and elGrocer; hyperlocal players such as Talabat and Hungerstation; and omni-channel players among offline retailers.
“All these four types have a good presence in the q-commerce space in the region. Omni-channels had the highest share in 2020, but hyperlocals are gaining good traction recently,” the report said.
Sectors such as grocery and personal care are driving the q-commerce market in e-tail space currently, while sectors such as electronics, fashion and home are still at a nascent level.
The report also revealed that new categories such as books, newspapers and magazines, stationeries, flowers, toys and games, sweets, gifts, clothing, electronics and IT, and furniture and fittings, and pre-packaged meals are currently being brought under the q-commerce fulfilment model.
“Among these categories, books, newspapers and magazines, stationeries, flowers, toys and games are focus areas for many players for immediate expansion,” the report said.
The report also revealed that dark stores and physical retailers are increasingly leveraged for procurement and fulfilment of products in q-commerce.
Follow us on
