In the modern era of last mile delivery innovation, a new model of rapid commerce is emerging. As a service model, it is like an intermediate offering between quick commerce and e-commerce. In this model delivery window can be for few hours for an online order, which is higher than quick commerce and lower than e-commerce. A newer delivery model between q-commerce and e-commerce requires value addition along with differentiated positioning to register success, else it might lead to a theoretical model. As, there are significant difference in product categories and associated buying behaviours between q-commerce and e-commerce at two major extremes of ad-hoc buying and planned buying, rapid commerce can be an experiment.
The genesis of e-commerce lies in convenience of buying, wherein customer can access to a wider range of products and get it delivered without any hassle of going to retail market. Hook for a customer for accessing an e-commerce portal is largely for planned buying of a specific item, although a lot of buying also take place post logging in to portal due to visibility of products or offers. While the genesis of q-commerce lies in quick delivery for ad-hoc products at last minute. Q-commerce category started with milk and expanded to groceries, but lately q-commerce players are trying to expand other categories like electronics and cosmetics. Even in these categories the target positioning around turnaround time for last minute requirements. At one end q-commerce is penetrating in urban metro markets, where time is constraint for buyers. E-commerce is penetrating in semi-urban / rural markets, where range availability is a constraint.
Back-end of each model varies significantly in terms of fulfilment centre, delivery density and inventory pattern. Q-commerce model serves lower SKU count with higher order frequency per SKU at last mile fulfilment centre. These centre serves a radius of 3-4 Km, having high drop density, considering time constraint of service window. In the newer scenario q-commerce companies are developing different approach for specific range, like electronics, through tie up with specialised retail chains or stores in order to serve within 30 minutes without increasing inventory carrying cost. It can be a win-win for both q-commerce and retail chain in boosting their sales. On the other hand, e-commerce fulfilment centre caters wide range of SKU to a wider geography. E-commerce players are also offering next day delivery to their customers. Many a seller on e-commerce platform are dispatching products from single origin to all across the country with premium and normal delivery schedules.
In the rapid commerce model, service providers are planning to develop a network of multi user facilities of last mile fulfilment centre, from where e-commerce companies can deliver in a window of 2-4 hours. This will lead to a scenario, where count of last mile fulfilment centres holding inventory will be lesser than quick commerce but higher than e-commerce. Which means optimisation of inventory holding along with service window.
Induction of one more channel of rapid commerce will increase cost of distribution to sellers, in terms of additional point of operations and additional inventory holding. Sellers will be ready to absorb such incremental cost only when adoption of this channel among buyers is high.
But the value proposition of rapid commerce is still not clear from the buyer’s perspective. Normally an ad-hoc buyer might not wait for few hours for getting product, specially if q-commerce is offering the similar product within 30 minutes. While a range seeker might not get compete range of product from such rapid commerce delivery model.
As model of rapid commerce is not for categories for instant requirement or ad-hoc requirement, the incentive for a buyer to hook on such channel will be limited. While the range seeker customer might not hook to such channel due to limitation of SKUs availability compared to an e-commerce platform or brand specific D2C store. So, it will be early to say about future prospect of such delivery model.