Q-Commerce: the Business of Fulfilling Instant Wishes

Q-commerce, the superlocal and superfast delivery of anything to your doorstep, has long been expected to become the future of e-commerce. With covid speeding the digital change for all economies, this future comes today.

Taking the Hit

F&B and retail are perhaps two of the hardest hit industries by the pandemic. The restrictions on eating out and being out meant that restaurants and retailers had to explore alternative ways of extending their experience into customers’ homes.

For restaurants, this goes beyond offering food delivery, but also repackaging their menu offerings to make them more “takeaway-friendly”. For retailers, it meant offering the same type of brand experience and level of customer service, but translating them online. Both needed to adapt and take very quick action to the swiftly updated regulations in order to continue operating.

Even after the pandemic, digital offering and on-demand delivery will remain a must for both the restaurant and retail industries. Those who were able to ride through the Covid-19 crisis were merchants who could still incite demand despite not being able to physically receive customers. It will continue to be the norm from here on, as customers have also come to expect the convenience that comes with on-demand deliveries.

Meeting the New Demands

Fast on-demand deliveries are something customers have already grown used to. foodpanda offers a wide selection of eateries to choose from. Beyond ordering from restaurants, customers can also order their necessities from pandamart and foodpanda shops, and have them conveniently delivered to their doorstep as fast as 20 minutes.

Yet this is not a time to become complacent. Being at the forefront of the q-commerce economy means we need to constantly push ourselves to innovate and better the experience of convenience for our customers. Always looking to push the envelope, we have launched a number of initiatives - including our pandafly project, a delivery test flight using drones. Another example is pandago, our Logistics-as-a-Service, that allows merchants to request for a rider to fulfill their delivery orders at any time of the day.

On the operations side, smooth onboarding for new vendor partners is key. When the pandemic hit, we mobilised our vendor management teams and accelerated the process for new vendors so that they can start retailing in the same week they register. It was one of the reasons that we were quite successful signing up the more “traditional” vendors, including hawkers. Through our partnership with WhyQ, Singapore’s largest hawker food delivery service, we helped over 1,000 hawker stalls across 57 hawker centres offer their products via our platform.

And then there is our responsibility for the vendors. The crisis has made it even more important to act as a community, reinforcing the need to support our merchants. We have worked closely with the relevant government agencies to offer grants and aids to tide our partners through this difficult time.

The Rise of the Q-Commerce

As we find ourselves in the center of the nascent q-commerce industry, let’s explore its key characteristics. By adapting to these requirements a business can secure its future and position itself to best suit customers’ expectations.

Fewer items, more orders

We have observed a rising demand and frequency for delivery of products in smaller quantities, rather than urchasing many items in larger quantities. This trend, or what we term quick commerce (q-commerce) is poised to be the next generation of e-commerce. For businesses operating in the convenience economy, the key to survive is to continue looking for ways to make our delivery process even more efficient. Convenience and speed will be even more imperative for delivery platforms moving forward, and I strongly believe that foodpanda is in a prime position to continue offering both to our customers.

Decentralised geography

For a while now, we’ve also seen a trend of decentralisation of workplaces and shopping habits, which has certainly been accelerated by the pandemic. As work from home becomes a mainstay for the foreseeable future, we are decentralising from the central business district, resulting in increased pockets of activity in suburban neighbourhoods. Our purchasing habits have also become more localised and instantaneous to our neighbourhood shops and malls, driving an upturn in q-commerce as more businesses turn to offering on-demand delivery. Businesses that are not able to offer on-demand deliveries may find themselves losing out.

Flexible logistics

To deliver a lot of small orders all over the place and control the costs, you need vast logistics capacity. With this in mind, we have tapped on the logistics infrastructure we’ve built through the years to help businesses expand their on-demand services or introduce delivery services. Our logistics solution, called pandago helps businesses cope with the rising demand for delivery by enabling them to tap into foodpanda’s community of riders to fulfil deliveries. By lowering the entry requirements - you don’t have to be a foodpanda merchant, for example, and we don’t charge admission fees, - we made this service easily available for the vendors. And that means that customers get to choose the one they want.

New players

The decentralization of workplaces and shopping habits also gives rise to increasingly dispersed demand. This means customers expect their specific demands fulfilled in each locale in a speedy and efficient manner. New solutions respond well to this challenge, like cloud kitchens and virtual brands. Restaurants explore alternative ways of meeting consumer demands while decreasing costs spent on overheads.

Nurture the Three Communities

In the heart of the q-commerce phenomenon lies customer service expectations. People want their specific orders to be delivered fast, at low cost, and without detriment to the quality. They want to have similar brand experience to what they know in other formats. To achieve that, we need to understand the needs of all three communities that engage in q-commerce:

1. Customers expectations:

   Choice. Customers expect to find exactly what they’re looking for and receive it the way they want. We continue to expand our restaurants and shops networks, as well as the variety of offerings on our platforms. We offer orders to be delivered or picked up. We introduced a mix-and-match feature where customers can order from various hawker stalls and have them delivered in one order, paying only one delivery fee. It makes the experience of ordering closer to going to a hawker centre.

   Sustainability. Customers want to build a trusting relationship with brands, and ecological awareness is a big factor. We’ve collaborated with popular bubble tea chains Each a Cup, Chi Cha San Chen, and Gong Cha to gift a foodpanda-branded reusable straw with each pickup order. Customers can also purchase reusable utensils and cups on pandamart at almost cost price, a decision in line with our commitment to lower the barrier when choosing to go green.

   Recognition. When you’ve built a relationship with a brand, you expect to be appreciated. Rewards, loyalty programs, and specials are all part of acknowledging the choice your customers continue to make. We recently launched our challenges and rewards feature where we involve customers in a journey, rewarding them upon the completion of certain challenges. pandapro, our subscription programme, has also just been revamped and we look forward to rolling that out to our full base next year.

2. Vendor partners expectations:

   Unlocking new customers. It is our responsibility to help vendor partners reach out to as many customers as possible. We provide a toolkit that enables entering the q-commerce ecosystem smoothly and at minimum cost. To that end, we’ve already launched pandago, and have also successfully ran testings for our drone delivery system, pandafly.

   Supporting their growth. When entering a q-commerce community, a vendor expands their horizons - and with new possibilities come new challenges. To make sure we share our knowledge systematically, we have built a robust merchant resource page. There vendors can find tips on how to grow their business in partnership with us.

   Cost saving. After the hard months, vendors need more support than ever to help them optimise P&Ls. We are launching new tools to help them reduce overheads and make it easier to service customers, either online or offline.

3. Riders expectations:

   Fair employment & support. Riders are the invisible heroes behind the rise of q-commerce. It is most important for us to ensure that our riders feel empowered and supported - by providing them with a fair remuneration system, added incentives, and prioritising their safety.

The Fast New World

Q-commerce is going to accelerate the adoption of technology - for both customers and retailers. Customers are going to increasingly expect items to be delivered as soon as possible, while retailers will find that offering speedy deliveries will become more of a necessity than a good to have. As the pioneer of q-commerce, we feel responsible for ensuring that customers get what they want rather immediately, while also helping our vendor partners in their journey of incorporating technology into their business model.