Quick commerce may just be the answer for last mile supply chain
Over the last few weeks, the shortage of certain products, especially poultry in some countries in Southeast Asia has not only resulted in an increase in demand but in price as well. Countries like Singapore and Malaysia have been struggling to ensure the supply of poultry was sufficient.
Apart from poultry, other food products, and essential items were also beginning to have a supply chain problem. While many felt the shortage was a result of traders wanting prices to increase or a lack of raw materials due to the conflict in Ukraine, the reality is, that this is probably just the beginning of what could be a long supply chain problem for food.
Despite this, quick action by Singapore and Malaysia has led to some pressure on the supply chain. Both countries have looked towards alternative methods in ensuring the food supply remains undisrupted. This includes producing food products that do not rely heavily on the supply chain.
While this problem is being attended to, consumers on the other hand are still finding themselves having to hustle for poultry and other essential food items in groceries and such. Some stores have even imposed limits on the number of purchases on certain products.
Thankfully, quick commerce is now helping solve this problem. Quick commerce basically refers to on-demand delivery or e-grocery. A new and faster form of e-commerce, quick commerce combines e-commerce with innovations in last-mile delivery. Simply put, quick commerce will get products at a much faster pace compared to other e-commerce deliveries.
Unlike same-day logistics delivery, quick commerce is most adopted for grocery purposes in Southeast Asia. For example in Singapore, foodpanda’s quick commerce focuses primarily on groceries and household items. In fact, foodpanda reported a 250% growth in fresh grocery orders during the pandemic and a 160% growth in grocery goods.
According to Chris Urban, Director of Marketplace for foodpanda in APAC, foodpanda was the first platform that scaled quick commerce across APAC and continues to find ways to improve its services, especially as customer demands in recent times continue to be increasing.
Speaking at a session during the recent eTail summit in Singapore, Urban pointed out that providing ultra-fast delivery, which in this case is under 30 minutes, is just one part of the equation of quick commerce. The other important part is ensuring the products are available whenever a consumer needs them.
This means ensuring suppliers, be it small grocery stores or large hypermarkets, are able to meet the demands of the customers. The recent hustle for poultry meat for example could be made simpler when shoppers are able to purchase online and have it delivered to them quickly. Not only is this a more convenient method, but it also ensures that there is sufficient supply for all customers.
Looking at the technology and delivery behind quick commerce, Urban explained that foodpanda has been able to ensure they are able to match the right delivery riders to the nearest grocer and customer thanks to their backend system which is capable of processing the data at speed.
As such, while supply chain issues are expected to continue for some time, quick commerce could be the answer to solve the last-mile supply chain problems. While there are other providers of quick commerce in APAC, foodpanda has been leading the industry. The company currently operates in over 10 countries in the region and continues to look to expand its services.
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