Q-Commerce: How does it work


Meaning of Q-Commerce

Q-commerce also known as quick commerce refers to an economic business model characterized by quick on demand delivery of customer orders. It is newer form of business model that tends to make delivery of ordered items within an hour of placing the order. It can be called as e-commerce in new and faster form, holding the benefits of both traditional e-commerce with transformations in last mile delivery. Overall, the premise is largely similar to e-commerce but the main differentiator is speed of delivery that is not done in days but within one hour or less to remain competitive. Q-commerce model of business has expanded the breadth of what can be ordered by individuals, with perishable items such as groceries being the large niche where q-commerce majorly focuses on.   

The main focus of q-commerce is on micro to smaller quantity of few items ranging from groceries, medicines, personal hygiene products to stationary goods. Q-commerce is used in interchangeable manner with ‘e-grocery’ and ‘on-demand delivery’ paying attention on small quantity order of customers. Due to growing popularity of Q-commerce nowadays, the online sellers are increasingly shifting from traditional and large warehouses located at cities outskirts to micro warehouses located near the point of delivery. Overall, it can be said that quick commerce is a future of commerce and online sellers, and in coming years these sellers will shift from traditional business model to Q-commerce business model. 

Features of Q-Commerce

Various features of Q-commerce are described in points given below: – 

  • Faster Delivery Time- Primary focus of Q-commerce is to offer faster delivery of good and services to customers as compared to the conventional retail outlet. It is a platform providing convenient and time saving process to people.   
  • Anytime Delivery- Q-commerce model of business gives customers the facility of delivering orders at any point of time suitable to their availability. It does not limit the customers to their fixed business hours.  
  • Convenience- Convenience is one of the most key features of q-commerce allowing customers to do shopping at anytime and anywhere by just using their smartphones.  
  • Reliability- Q-commerce services are provided by reputed brand due to which customers are assured of the quality and delivery of their orders. 
  • Order Tracking- The order tracking is another important feature of Q-commerce. Customers can easily track their shopping orders on real time basis. 
  • 24 Hour Operation- The Q-commerce model of business operates 24 Hours a day and 365 Days a year. It is not limited to daily opening hours that are set for most of the traditional business outlets. 
  • Lower Pricing- Q-commerce brand offers product and services to customers at lower prices. They purchase large inventories in bulk that reduces the per unit cost of each product thereby enabling them to provide lucrative discounts.  
  • ‘One Stop Shop’- The quick commerce serves as one stop shop for people where they can buy all things of their needs at one place. Companies following quick commerce model of business develop their own app via which multiple products can be ordered from one platform. 

How Q-Commerce works?

The Q-commerce startup operates differently from traditional e-commerce business in following ways: – 

  • Focus on High demand products only- Quick commerce startup list only the most demandable items on their apps, instead of focusing on all types of goods. It comprises of key grocery items and other products that are ordered more frequently by customers.  This strategy brings down the storage and warehouse expenses that enables companies to rent compact spaces within cities or town instead of bigger warehouses located on outskirts of cities.   
  • Enhanced efficiency via Micro-warehouses- A ‘micro-warehouse strategy’ is followed by q-commerce startups for which they select popular neighbourhoods in cities having high online presence. They buy, rent or lease micro-warehouse in such locations and are called ‘dark stores’ or ‘cloud stores’. The cloud centres have efficient SKU management strategies, located in city’s heart such that employees or delivery partners can easily pick and deliver items within the minutes. This way companies are able to save time and money to be spend in travelling from and to warehoused located at outskirts of cities which would also delay the delivery completion time.   
  • Strategized Deliveries- The delivery peoples are hired and partnered by q-commerce companies following the specific route basis, like morning or evening. A city is separated into zones along with distinct categories on the basis of number of deliveries to be made within them. This strategy enables in allocation of last-mile delivery partners to every zone as per the deliveries number. All of the delivery partners are monitored via GPS tracking system and partners doing efficient deliveries are given incentives. Moreover, delivery partners are assigned more than one delivery order by companies on the basis of order location and distance. This assist in avoiding the to-and-from movement of delivery personnel, thereby reducing the overall delivery timings.     
  • Delivery Pricing Model- Q-commerce model of business charges higher cost as compared to traditional e-commerce due to the inclusion of last-mile delivery system that brings additional cost for q-commerce companies to be covered. Therefore, most of such companies charge nominal delivery cost from their customers that varies as per the value of order and distance from cloud store.  

Limitations of Q-Commerce

The limitations of quick commerce are: – 

  • High Startup Operational Cost- There is huge startup cost required by companies at initial level who are looking to start Q-commerce delivery operations. Q-commerce companies need to provide infrastructure and other facilities requiring higher expenses in order to support the last-mile delivery. This involves setting up warehouses for storing products, hiring and training the delivery personnel’s, and providing such personnel with necessary tools for delivering goods. Therefore, involvement of high cost with these deliveries makes it quite difficult for q-commerce startups to operate in low margin markets.  
  • Risks to Local economy- The model of q-commerce delivery leads to elimination or reduction of need for local market by people as they get access to all of their daily requirements at one place. This thing may hurt the local businesses existing in market because people will prefer buying their daily needs online than travelling down to market in their locality. Moreover, the entire locality’s economy may get negatively influenced due to reduction in footfall at these local markets.