Should small brands explore quick commerce?


Should small brands explore quick commerce?

Quick commerce, or q-commerce, is one of the hottest topics in the evolving retail environment. But what exactly is q-commerce, and is it a channel that FMCG entrepreneurs and small and medium manufacturers should be paying attention to 

What is quick commerce?

Quick commerce offers fast delivery services—often 10-15 minutes—of a limited set of staple FMCG products ordered through apps or online. Quick commerce ventures operate out of small warehouses (also called dark stores) located within the delivery area. 

As we break down the key characteristics of q-commerce, the role this channel could play for SMB manufacturers becomes clearer: 

  • Online- or app-ordered: NielsenIQ’s latest report on small and medium sized FMCG businesses shows that consumers largely associate small brands with offline channels. “Street vendor or farmers’ market” as well as “mini-market / bodega / small or independent grocery store” were named as top channels with 37% and 25% of answers. Online channels scored significantly lower with “online purchase from a retailer” only being mentioned by 12% of respondents. 
  • Limited set of staple FMCG products: The key term here is “limited.” The average supermarket has more than 30,000 different items on its shelves, while quick-commerce typically offers an assortment of less than 3,000 different products. With such limitation, q-commerce companies focus on high-demand products and a comparably low category depth. Category leaders have an advantage and slow-mover products face the risk of fast delisting. And to top it off, q-commerce products can differ by delivery area to match local preferences. 
  • Limited delivery area: Again the key term is “limited.” Q-commerce services are typically limited to specific neighborhoods of large cities, and the area a dark store usually covers has a radius of about 2 km.  

In short, buyers don’t think of online channels as the first place to find SMB brands, and the channel concept favors high demand products with a low category depth. The reach for products that are being offered is less predictable than with traditional retail channels.  

These limitations don’t completely exclude smaller brands from being listed with q-commerce. It can even be a good “image” fit for some, highlighting local authority and authenticity for the manufacturer and the q-commerce company. 

But if this is not your strategy, other retail channels likely hold more growth potential for your brand—from identifying new partners to optimizing your current set-up. With the right data and analytical tools, you’ll be able to make confident strategic decisions about your individual approach. And NielsenIQ is here for you to find that growth. 

How can we help?

We know not every question has an easy answer. Tell us your unique situation or what you might need, and we’ll work with you to find a solution that makes your life easier.