- Southeast Asian quick commerce boomed then busted rapidly.
- Profitability challenges plague the sector.
- India’s success offers potential lessons for Southeast Asian players.
Blink and you’ll miss it
The quick commerce trend in Southeast Asia experienced a meteoric rise in early 2022, only to fizzle out at breakneck speed.
Many players, including Indonesia’s Dropezy and Bananas, Vietnam’s Rino, and Thailand’s Apricot, have either shut down or pivoted their business models.
The past year saw minimal funding activity in the sector, except for Indonesia-based Segari’s fundraise and Singapore’s Ryde going public on the NYSE.
The money pit dilemma
The challenge for quick commerce lies in achieving profitability. Players require substantial capital to build dark stores near consumers’ homes and maintain the right product mix to ensure customer retention.
Moreover, the necessity of 15-minute grocery deliveries is questionable when regular e-grocery players offer similar services at lower prices, albeit with slightly longer delivery times.
In contrast to Southeast Asia’s struggles, India’s quick commerce sector is thriving. The industry’s gross merchandise value in India grew by 77% to US$2.8 billion in 2023.
Key factors contributing to this success include effective dark store management, direct sourcing from brands, and expansion into higher-priced categories beyond FMCG products.
Experts suggest that Southeast Asian players could potentially emulate India’s success by focusing on customer retention, building trust, and maximizing dark store efficiency.
To read the original article: https://www.techinasia.com/visual-story/key-players-southeast-asias-quick-commerce-space?ref=featured-subex-0
