Q-Commerce to drive UAE’s online delivery sector; Spreads into more categories

By Shilpa Annie Joseph, Trainee Reporter
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Delivery
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Do you want anything to be delivered in less than 60 minutes? Then here comes q-commerce to the picture.

Add the letter ‘q’ to the commerce as it could be the fastest-growing segment of eCommerce-driven transactions in the UAE. No wonder the ‘q’ stands for ‘quick’.

Food delivery was clearly where q-commerce (Quick Commerce) got its start, and it still represents the biggest chunk of the business. However, more categories are emphasizing speed of delivery as a competitive advantage with consumers. Other than food delivery, the q-commerce is stepping into other categories in the online sector.

Q-commerce is now entrenched in grocery delivery, with Talabat last year rebranding its 30-minute delivery service from ‘daily by Talabat to ‘Talabatmart’. Anything that has consumers reaching for their mobiles and apps from their homes and wanting delivery within those 30 minutes is now considered q-commerce. Now, the q movement has also spread to fashion purchases, gifting, and pharmacy delivery.

Sandeep Ganediwalla
Sandeep Ganediwalla
Regional Partner
RedSeer Consulting

“It is being driven by food delivery and, increasingly, online grocery. Other categories such as pharmacy are limited by government policies on selling prescription medicines online. The most notable impact of q-commerce is that it has enabled consumers to try new categories online. This has been characterized by impulse purchases such as ordering a gift or sending flowers. The growth of q-commerce is enabled by the newly built hyper-local capabilities of players. So, it is not surprising that many food delivery players introduced these services as well.”

Even though there is a given 30-minute guarantee, delivery services can only expect to serve a specific neighborhood and anything beyond that will be risking it.

“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 variances in delivery fees and longer delivery times. Several players are shifting to a cloud model from where they can fulfill orders of multiple categories, thus improving unit economics and reducing delivery times,” Mr. Ganediwalla added.

Related: Google looks to convert YouTube into e-commerce hub

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