Q-Commerce: Pandemic Hype or Here to Stay?
With the world going back to being fully normal, Q-commerce might be facing some challenges. Is the end of the pandemic putting an end to fast delivery or is the trend here to stay?
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The pandemic has clearly impacted the industry landscape with sectors gaining interest, others failing and some creating revolutionary movements. While the need for industries that provide more of contactless services peaked, shopping for goods remained a need despite the ongoing lockdowns and social distancing measures. This allowed Q-commerce (Quick commerce) startups to successfully pave their way up the industry ladder. As the need for instant, fast and efficient delivery peaked, more startups started adopting this line and sizable funds had been raised by those startups. At a time when the world went back to normal, Q-commerce remained the new norm as its efficiency and convenience remained a go-to, however, its hype tuned down a bit as the normal day-to-day interaction got back on track.
With Q-commerce branching out to cover a number of industries fast delivery, we focus in this article on the performance of two branches of it, namely Transport & Logistics Last-Mile Delivery and Food & Beverages Delivery. It is clear that the two industries in MEAPT saw their best days in funding and deals in 2021, the year following the onset of the pandemic, however, despite an edge-down in both deals and funding, 2022 performed relatively around its previous year’s numbers.
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*Data obtained from the MAGNiTT's Analytics
Funding in the sum of both industries saw a 2.7x rise between 2019 and 2020, as the pandemic imposed delivery as the primary choice. However, a seven-fold growth was seen in funding between 2020 and 2021 backed by three MEGA deals closed by Turkey’s Getir, which accumulated $983M across three deals in 2021, pushing the industry to scour new heights that year. Removing the impact of those deals, the industry reported a nearly stable level of funding between 2020 and 2021. Moving forward post pandemic years, 2022’s near $1Bn funding total of Last-Mile Delivery and F&B delivery was also driven by a $768M Getir deal which if phased out, keeps the industries at a level approachable to its previous two years. In a nutshell, it is clear that Q-commerce’s Last-Mile Delivery & F&B Delivery gained interest and investor appetite in the MEAPT region during the pandemic and the years following it, but the hype seen in overshooting number was mainly driven by a single startup.
*Data obtained from the Startups tab of MAGNiTT's Directories
A number of startups filled the frame of quick delivery over the 2020-2022 period as investor appetite was seen on the rise with startups like Turkey’s Getir, Pakistan’s Krave Mart, Egypt-based Yalla Fel Sekka , UAE-based Fine Diner, and KSA-based Barq recorded funding rounds that served in promoting the industry overall. While the rounds were of smaller values, each of these startups still managed to record funding in 2022, crossing the pandemic line by two years and emphasizing that the industry is still active.
On another level, 2022 saw the shutdown of one of Pakistan’s top-funded startups Airlift, which raised more than $100M between 2019 and 2022, the closure was coined to the funding crunch coming along the lines of the global recession and recent downturn in capital markets which impacted economic activity across the board and had devastating impact on Airlift. Along the same lines, the performance of Q-commerce and its different branches remained controversial indeed. As the industry saw a slight cutback in funding in 2022, top funded Turkey’s Getir which closed its $768M in March 2022, announced job cuts later during the year. The shutdown of a startup that had interestingly made it to the top of Q-commerce in MEAPT over the past couple of years and the job cuts of another that had not closed any but MEGA deals over 2021 and 2022 allowed people to question if the continuity of Q-commerce startups is at stake, if the future of the industry is wavering or these events are single-sided.
Data, however, confirms that the total of smaller deals in Last Mile Delivery and Food & Beverage delivery had not changed much up till the end of last year, it is true that the hype of late stage funding subsided as the macroeconomic challenges weight their toll on the overall ecosystem, but their impact on Q-commerce was of no difference than their impact on any other industry that hyped during the pandemic.
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