'Q' is fastest growing category in UAE's e-commerce as delivery speed matters
Delivery within 60 minutes is winning consumers and new categories as fashion, gifting
Dubai: New alphabets keep getting added to commerce since ‘e-’ made its debut. There are ‘d-’ and ‘s-‘; ‘m-‘ is showing up more frequently. There is even one with a 'c'. (For those who don’t know these yet, they stand for ‘digital’, ‘social’, ‘mobile’ and 'conversation', respectively.)
Add ‘q’ into the mix, because it could well be the fastest growing subset of e-commerce led transactions in the UAE. Not surprising given that the q stand for ‘quick’.
Need something to be delivered well within 60 minutes? That’s where q-commerce comes in.
Food delivery was obviously where q-commerce started rolling, and it still represents the biggest chunk of the business. But more categories are adopting speed-of-delivery as a winning point with customers.
Q-commerce is now entrenched in grocery delivery, with talabat last year rebranding its 30-minute delivery service from ‘daily by talabat’ to ‘talabat mart’. Anything that has consumers reaching for their mobiles and apps from their homes and wanting delivery within those 30 minutes is now being added to q-commerce.
Now, the q movement has spread to fashion purchases, gifting and pharmacy delivery. It is being “driven by food delivery and, increasingly, online grocery,” said Sandeep Ganediwalla, regional Partner at RedSeer Consulting. “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 through online. This has been characterized by impulse purchases such as ordering a gift or sending flowers.”
A win-win?
Will more retailers sign up for the 30-minute delivery run? Or would this category require more orders from the F&B and grocery categories to ensure the run can sustain itself?
Given the 30-minute promise, delivery service provides cannot expect to service beyond a certain neighbourhood. Anything beyond that will be risking it.
“The growth of q-commerce is enabled by the newly built hyper-local capabilities of players,” said Ganediwalla. “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 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.”