Since 2020, Southeast Asia’s digital economy has seen a considerable surge in online shoppers. The region is home to more than 400 million internet users, 70 million of whom turned to online shopping during the pandemic.
As more people in the region go online to meet their daily needs, including travel, groceries and household essentials, their expectations of the shopping experience have risen. Beyond price and product quality, availability and delivery speed are also influencing the path to purchase.
To keep up with shopper expectations, a slew of innovative new business models have emerged in response, enabling Southeast Asia’s retailers to get products to shoppers in their homes on the same day, or even within the hour. Known as “quick commerce” or “Q commerce”, these models’ main draw is their speed and on-demand availability, and brands are paying attention.
According to forecasts by Edge by Ascential’s retail data and research portal Edge Retail Insight, quick commerce’s gross merchandise value (GMV) worldwide grew by 72%. In 2021, China was the most advanced market for quick commerce — after North America, accounting for 43% of the total quick commerce share.
In Southeast Asia, a number of different on-demand delivery players leaped at the opportunity offered by quarantine lockdowns and travel restrictions. Consumers unable to travel or leave their homes opted for food delivery services to meet their needs, with this demand extending to other product categories.
On-demand food delivery services such as Grab and foodpanda expanded their portfolio of products to include groceries, fresh produce, household goods, and personal care items. Last-mile delivery services such as Pickupp and RaRa Delivery instead focus on getting products to consumers as soon as possible.
Food delivery services
GrabMart by Grab
At the height of the COVID-19 pandemic, Grab introduced GrabMart, an on-demand daily essentials service that offers its customers same-day delivery. After testing the concept in a handful of Southeast Asian locations, GrabMart is now available in 50 cities across Singapore, Malaysia, Indonesia, Thailand, and the Philippines.
The service has so far partnered with 3,000 retailers, giving its customers access to fresh produce, healthcare, personal care, household items, and even flowers. These products are available to consumers either as soon as possible or at a later date, as per their convenience.
Pandamart by foodpanda
First launched in Singapore in October 2019, Delivery Hero-owned foodpanda’s Pandamart is an on-demand delivery service offering groceries, beauty and healthcare products, and household goods. Pandamart operates out of “cloud stores”, which are built for deliveries only, and do not have a retail storefront. Inventory is arranged in a way that maximises picking efficiency, so groceries and essentials can be packed and delivered first.
Last-mile delivery services
Smaller companies in the region are stepping up to provide customers with a range of convenient delivery services using data. Pickupp is a logistics startup that serves customers in Singapore and Malaysia, offering express, same-day and next-day delivery options at affordable rates. Customers also have the option of receiving their orders within the hour, or, for those in Malaysia, collecting the items from a wide network of pick-up spots.
In Indonesia, RaRa Delivery is an on-demand logistics company that aims to offer customers same-day deliveries. The service relies on proprietary technology to create batches of orders and optimised delivery routes based on real-time information, including traffic. Both RaRa Delivery and Pickupp have partnered with external delivery agents, marketplaces and ecommerce platforms to offer access to a wide selection of services.
Currently, food and groceries account for the bulk of quick commerce. However, it may not be long before other product categories such as electronics and healthcare embrace this new model, too. The rise of the on-demand delivery model and economy has transformed consumer expectations in a way that positions availability as one of the most critical characteristics for sales, reputation and long-term brand loyalty.
Brands wanting to adopt an on-demand delivery model need to ensure their products are available online to consumers in the first place. To participate in the quick commerce landscape, brands must ensure that the product exists on their online shelf in the first place.
Simply being in stock when your customer clicks that “add to cart” button can make an extraordinary amount of difference and will become more of a priority in an environment where household budgets are shrinking and customer demands are growing. Being available all the time on all the channels you sell on will become a key consideration for marketers in 2022.