The dark side of Q-Commerce.

The dark side of Q-Commerce. Too much instantaneity in our daily lives ?

It got me wondered, all those new delivery services, relying on dark stores or dark kitchens, delivering us food and goods in less than 15 minutes; is it really the future we want to live in ? Think about it, do we really want to live in a world where everything is instant ? Is it a bad habit ? Are we leaving the kid’s dream of desiring something and getting everything right away ?

I had this reflexion while ordering my coffee today, since it’s the beginning of the university year most new employees are student who are learning how to make coffees, hence it takes more time than the usually – learning takes time – . I felt that I was impatient and that it was not like usual, which made me wonder if I was getting too used to having everything very quickly. 🧐

You probably noticed, given the crazy amount of money these companies spent in marketing their products, that a bunch of Q-commerce (quick commerce) businesses are competing at the moment. Flink, Gorillaz and many others are racing to be the “on-demande delivery” or “e-grocery” kings. The ones that will bring to you, an any time of the day, that liter of orange juice you are missing, that piece of cheese you need for a late snack, that bottle of wine you need for a last-minute date. Instead of going out to your local little store still open late or at night, you can just click and order.
Q-commerce is making it’s money on the fact we are just lazy urban people. Because it is necessary to specify that these services concern only the big cities, they could not be profitable on less dense or too extended geographical zones.

Maybe I am not seeing the incredible potential here of the quick delivery business ? I think that my assumptions are based on the fact that I myself worked in a delivery company.
Deliveroo for example, created in 2013, has been losing money since then, and lost $309 million in 2020 while its revenues climbed to $5,64 billion.

The only two things in my opinion that are profitable in this type of business are :

  1. dark kitchens, own by the company itself, which are highly efficient production units without a storefront that are optimized for delivery, selling only via delivery.
  2. selling marketing services to their restaurants/partners

Even though they take about 30% on each orders make into the “normal” restaurants, this revenue is not enough for them to stop losing money. The main problem for these companies is that they have to spent gigantic amount of money on marketing to customers.

With Q-commerce, it’s not about dark kitchens anymore but about dark stores which would qualify has strategically located warehouses, in this case, in the very center of the city. Dark stores allows them the maximum agility and flexibility in order to deliver as quick as possible.

I have many concerns about the impact of these structures on the rest of the convenience stores. Are we going to assist to witness the death of these stores ? I mean, dark stores are no fun, and I recently read an article about a little supermarket in the very center of Paris who became a dark store, meaning a warehouse bad-looking unfriendly place, dark here takes on its full meaning. Are our city and town centers going to look like industrial zones ? A bit like what it was in fact looking alike during the big lockdowns of the covid crisis.

We have seen huge amounts recently invested in those quick delivery companies. Flink itself raised $240 millions last. For Paris itself, given the fact that many stores in the center closed during the covid crisis, I really think they will use this opportunity to buy a bunch of these places. I wonder how locals will react to these new-born stores that they can’t physically access ?

We could already witness the impact of Amazon on local small retail businesses, closing one by one when the owners retire. I do agree that this type of business have missed the opportunity to go online until now, relying on their loyal customers, and in fact, the covid crisis had a real positive impact in the profound changes that these companies must consider in their way of doing business. I think, for example that they could definitely keep their stores and either become Amazon sellers (or opening their own online shops) and therefore becoming themselves little “sort of” warehouses in the city centers.

Still, I wonder how these companies will end up making money. We can already guess the future here : the most successful ones will either buy the other ones or make them drown in the long run. Then giants like Amazon will probably buy them back. In my opinion, only a giant dominating the industry can make profits with its large scale.

There has been a few articles recently in the news regarding the possible soon end of the era of supermarkets, hypermarkets.

Has the hypermarket model had its day? This revolutionary concept of “everything under one roof”, popularized in 1963 by Carrefour, has conquered the whole world. Today, however, the French pioneer, like its competitors, is down on one knee. The crisis of gigantism, associated with the dehumanization of commerce and over-consumption, is the main cause. According to experts, the omnipotence of certain groups will be threatened within ten years. From now on, the whole sector is trying to save what can be saved, even if it means resorting to practices bordering on legality.

Three years after buying Whole Foods for $13 billion, Amazon has already launched its own brand, Amazon Fresh. This year they opened one of the first Amazon fresh stores in London. In France, Amazon already holds 10% of the consumer goods market.

I think we really must ask ourselves about the dehumanization of commerce and over-consumption. Also we must worry about our selfie-obsessed generation, where we always want to look happier than the rest of our peers on Instagram. Writing this article I am not sure I can make the link between these different concepts right away but I have the feeling there is more to it, that Instagram and social networks have largely contributed to the fact we are quite comfortable with the concept of dehumanization and that the extreme narcissistic society we live in is well connected with over-consumption.

To be continued…

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