Operational Hazards of Quick Commerce (and How Companies Must Adapt)

With the rise of e-commerce platforms and consumer demand for faster delivery times, one model is gaining popularity among MENA-region businesses.

This model is also posing a lot of logistical problems that businesses need to overcome if they are to survive.

Quick commerce, also known as q-commerce or on-demand delivery, is about delivering products to your customer within hours or even minutes of placing an order.

Quick commerce is all about convenience for the customer. We’re seeing it in more and more industries, but it’s growing in sectors such as groceries, personal care items, pharmaceuticals, and prepared foods. The transactions often involve smaller but more frequent orders, and they always come with an expectation of speed and service that many businesses are finding it hard to deliver.

So what can be done? How do the smaller players compete against Amazon and the other ecomm giants who excel at quick commerce?

Key Features of Quick Commerce

Quick commerce promises delivery times that are significantly shorter than traditional e-commerce, often within 10-60 minutes.

As for ordering, there’s a heavy reliance on mobile apps, real-time inventory management, and sophisticated logistics systems. Speed to delivery depends on local warehouses or “dark stores” (retail locations converted to fulfillment centers) to ensure proximity to customers. Small-scale facilities located within urban areas can expedite delivery.

“The purchasing decision is much easier for the consumer, so people are buying more,” says Abdelrahman El Naka, Head of Product team and Product Marketing Manager at RTG. His passion lies in business intelligence and data analytics, and he helps RTG clients find ways to improve user experiences and drive business growth.

For example, a weekly trip to the grocery store has been replaced by smaller online orders nearly every day. This huge surge in buying frequency is generating more revenue for companies poised to take advantage.

The cosmetics sector is another great case study.

“When the customer is finished (with a cosmetic item), instead of going to the mall to get another one, they’ll just get it in ten minutes from the vendor.” For them, if ordering online is easier, purchase decisions are easier to make.

So how does Abdelrahman help businesses in Egypt, Saudi Arabia and throughout the region get in on the quick commerce trend without blowing their operations budget?

“We need a base level of operational technology to make it possible,” he says. “Everyone builds a customer-facing ecommerce site, but not everyone builds the right operations into these sites.”

That’s where Robusta comes in.

Operational Hazards of Quick Commerce

Some of the obstacles our business partners face when implementing quick commerce include the logistical complexity of “last-mile” delivery. Ensuring timely delivery within short windows can be difficult, especially in densely populated or traffic-congested areas.

“Quick commerce depends hugely on human labor, specifically delivery drivers,” Abdelrahman explains. Where once there was a single large truck delivering everything, now there may be hundreds of smaller vehicles making those deliveries.

“Quality control over hundreds of drivers is the challenge. “This is a (challenge) particularly in our region.”

Inventory management can be another headache. You need real-time inventory tracking to prevent shortages or overstocking.

All of this means higher operational costs. The need for a large, often on-demand workforce for quick deliveries can drive up costs. Meanwhile, setting up and maintaining local fulfillment centers and advanced technology systems require significant investment.

Quality control is another issue. Think about perishable goods and the need to ensure freshness of items like groceries during rapid transit.

Finally, the high expectations for speed and accuracy mean any delay or error can lead to customer dissatisfaction. This means you’ll have to improve your customer service game by handling complaints and returns efficiently in a high-speed environment.

Mitigating Operational Hazards

By addressing operational hazards proactively, quick commerce improves efficiency, customer satisfaction, and sustainability in your operations.

Implementing advanced logistics and route optimization technologies is part of the solution.

Instead of having central warehouses, with one large investment, you now need multiple assets in multiple locations. This presents operational hazards, as multiple smaller locations means more hiring and higher costs. Things like cooling units and other equipment must be duplicated (and maintained) across all facilities.

Funded companies have the advantage here.

“But companies are forced to do this because the consumer behavior is there,” Abdelrahman states. “What we are advising for the smaller companies is to have a little bit of everything with one unique value proposition.”

For example, a smaller online grocer can compete with larger competitors if they have a unique value proposition that they are known for (amazing produce, for example).

“They may not be able to deliver in 20 minutes, but the customer will be willing to accept a slightly longer delivery time if they get the quality or the support that your business is known for,” Abdelrahman says.

Focus on essential and frequently purchased items and you’ll be able to grow from there.

You also need robust inventory management solutions. You can leverage AI and machine learning for better demand forecasting and stock management.

“In the grocery industry, for example, fresh products need to be prepared immediately, Abdelrahman says. This creates a bottleneck in order fulfillment because the “pickers” might get the shelf-ready items first, then go to the meat or fish area of a store and wait for the workers there to get the items ready.

“RTG builds real-time picking systems where the meat/fish area would be prioritized as needed so the picker gets these items at the right time for fresh delivery.”

Fashion is also highly dependent on inventory management. If something is not sent from a central warehouse, you have to check if certain sizes or colors are available.

“We provide a model that offers same-day delivery by connecting physical stores and warehouses via a transfer system that automatically triggers a delivery from the nearest warehouse to the customer.”

The order does not go to a specific warehouse; it initiates automatic transfers to the nearest warehouse.

Transparent communication channels make it all possible by keeping customers informed about their orders.

Since the consumer is expecting this to happen fast, communication is extremely important. This includes: real-time order tracking that is trackable by the user.

“For example, something we do in the grocery sector, is we send real-time notifications that an order is ready in seven minutes.”

It also requires having a strong customer support system. Nothing is more frustrating for the customer than to have a late delivery only to have to waste more time with an unhelpful chatbot.

“I always tell our clients they need to be conscious of what they are trying to achieve,” Abdelrahman says. “Giving the end user what they want is always a priority, but it shouldn’t come at the expense of profitability.”

The Takeaway

To achieve faster delivery times, regional businesses need to invest in tech but scale operations in a way that does not bleed cash. This ensures long-term survivability in the market.

“Until a quick commerce model can be found, you need to find a middle ground between quick commerce itself and your business’s unique value proposition.”

Fast delivery isn’t enough; if it’s not sustainable. That’s why quick commerce is never the core offering, but instead should be a series of operational changes that make fulfillment faster and more efficient.