Quick Commerce Opening Up New Opportunities For Retail: Barclays

By Steve Wynne-Jones
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Quick Commerce Opening Up New Opportunities For Retail: Barclays

'Quick commerce' or 'rapid delivery' grocery firms have been on the rise in retail over the past year, with operators such as Getir, Gopuff, Gorillas, Flink and Weezy seeking to shake up the existing market with the promise of near-immediate delivery services.

But are such developments a flash in the pan, related to the current COVID circumstances, or the start of a new chapter for grocery delivery? According to Barclays, while it is too early to make any definitive judgments, there are signs that the quick commerce market could have longevity.

'The willingness of VC investors to fund these businesses at high valuations – with Getir alone valued at approximately twice the market cap of M&S, for example – suggests that they envisage a valuable growth opportunity in the years ahead,' the bank said.

'A Market In The Gap'

As Barclays put it, consumer demand is certainly there in any case. 'The evidence suggests there is indeed 'a market in the gap', not just 'a gap in the market',' it said. 'We think there will be sufficient consumer demand for grocery immediacy that sizeable businesses can be created on the back of it.'

In addition, the quick commerce market offers potentially attractive returns, with more established players already earning strong returns in their more mature areas.


Consolidation is also likely, according to Barclays. 'There has been a proliferation of new entrants into this market in the last year, but even if the market turns out to be large we doubt that all will survive,' it said. 'The consolidation process even seems to be already starting.'

As to the impact that the quick commerce market has on traditional grocers, Barclays noted that the segment is likely to represent 'another unhelpful headwind rather than an existential threat'.

It said that the 'more exposed a grocer is to urban convenience stores, the bigger the challenge', noting that analysis of credit card data suggests new users of Gopuff don't seem to reduce their spending at other grocers.

Consumer Expectations Around Speed Of Delivery

Separately, a report by GlobalData, Q-Commerce – ForeSights, has suggested that increased competition by delivery aggregators has influenced consumer expectations around speed of delivery. The combination of busy lifestyles, urbanisation, smaller households, COVID-19 and an ageing population has all helped fuel what is likely to be a continued growth area.


“As consumers experienced stringent lockdown measures, they turned to digital solutions such as socialising via video and shopping for goods online," commented Carmen Bryan, consumer analyst at GlobalData. "Pair this with more than half of global consumers who are concerned about visiting stores because of COVID-19, and we can see the ideal recipe for the robust growth in q-commerce.”

GlobalData cited the example of Delivery Hero, which is offering consumers on-demand delivery via a network of delivery-only grocery stores within 30 minutes, and Glovo, which is also promising delivery of essentials within 30 minutes.

“The key takeaways from these emerging players boils down to speed, variety of goods, and accessibility," said Bryan. "The customer experience will be imperative to players’ survival, particularly as the market becomes over saturated with new entries and retail partnerships.

"On the one hand, this could mean more promotions and competitive pricing, which will boost consumer power; however, it could also increase a sense of ‘consumer entitlement’, whereby minor technical difficulties or hiccups leave people feeling frustrated – resulting in a migration to competitors.”


The future of quick commerce, Global Data believes, will include the adoption of more sustainable practices and further investment in innovative technology to optimise the speed of delivery times.

© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Technology news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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