Quick Commerce: Is this a profitable and sustainable way?

Is this a profitable and sustainable way?

The quick commerce trend has primarily accelerated due to its sheer speed, the convenience of ordering, and the rapid delivery. However, the faster turnaround times (TAT), combined with poor profits and greater delivery costs, put enterprises under pressure and made quick commerce a risky business model.

If we talk about Q-commerce in India, the cost of last-mile delivery for Q-commerce enterprises is  projected to be twice that of traditional e-commerce firms. Also, part of this industry works with gig workers. In this rat race to deliver within 10 minutes, the working conditions, health, and safety of the riders and delivery partners remain majorly compromised.

The cost of selecting and packaging can be decreased by rapid commerce players with the correct automation solution. Automated picking systems improve accuracy and productivity, two factors that are essential for online fulfillment. As opposed to manual operations, automated solutions can help a business save money on real estate rental costs by making use of vertical space that is often underused or nonexistent.

The question for new-age players is what kind of long-term moats they have built, as currently, burning more cash is the new trend. For a profitable and sustainable business model, the kind of strategy these companies build to tackle cash burn will be crucial for their success in the long run.

The Future of quick commerce

• Small shops and companies in metropolitan neighborhoods will eventually disappear due to quick commerce, suffering a fate similar to that of actual mobile stores in urban markets.
• Private equity companies that are backing these cutting-edge startups will start asking difficult questions. Many major players are turning to debt financing instead of equity fundraising as their funding sources are already running low. Numerous unicorns that received significant money and launched with a flourish have since seen their funding sources dry up, and numerous firms have failed.
• Only serious players who are committed to developing a successful model that prioritizes consumer needs and have their P&L in order will survive and emerge as long-term winners. Consolidation and rationalization among food delivery aggregators will be critical to improving – and potentially increasing – overall profitability.
• Incorporating other categories like pharmaceuticals, clothing, cosmetics, and gadgets. Already, platforms like 1MG, Pharmeasy, and Apollo are competing to speed up the delivery of the medications.
• A fleet of delivery robots or drones can further reduce last-mile costs by carrying more orders and reducing operational energy costs compared to manual operations.

What are dark stores?

High-level tasks in a typical warehouse system involve storing the products in the correct area, restocking the stock, choosing and packaging the components according to the order, and final shipment. In order to give delivery personnel ample time to reach the consumer, order arrival to dispatch times in dark stores should ideally not exceed five minutes (for a 15-minute guarantee time). As a result, creating a lean system to minimize time losses in all process phases due to unnecessary operator mobility or item searching becomes crucial for an efficient, quick delivery dark store or micro fulfillment centers.

How dark stores are changing the delivery systems?

Technological developments are making it possible to use space more effectively and to introduce intriguing new urban fulfillment possibilities, including dark stores. Internet retail sector sales are predicted to grow by 37 billion pounds by 2025, from 27 percent to 30 percent, according to the Future Gazing study.

A microcenter also requires workers to select and pack products, as well as prompt delivery services to get the products to customers’ doorsteps.

The attention that the sector is getting is only likely to grow in the future.

Final thoughts

Q-commerce is a newly emerging term that has opened many doors of opportunity in the commerce vertical. Keeping the current mindset in mind, picker/packer, loader/unloader, delivery, and inventory official/manager profiles will be prominent roles in this q-commerce industry, with a higher pay scale. In addition, quick commerce can also affect the job market in other ways. For example, it can create new job opportunities in the form of online customer service positions. Customers may need assistance with their online purchases, and businesses can provide this assistance by hiring people to answer customer inquiries and provide support.

Overall, quick commerce is an innovative way of doing business that can benefit both businesses and customers. It can also affect certain job markets, both positively and negatively. As businesses continue to embrace quick commerce, it is important to consider how it can affect the job market and how businesses can use it to their advantage.