UK QUICK E-COMMERCE (QUICK COMMERCE) MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The UK quick e-commerce (quick commerce) market size was estimated at US$ 6.21 Billion in 2023 and is expected to reach US$ 21.48 Billion by 2030, grow at a compound annual growth rate (CAGR) of 19.4% from 2023 to 2030.

Quick commerce refers to the ultrafast delivery of groceries and other daily essentials in as fast as 10-30 minutes. It involves setting up micro-fulfillment centers called dark stores in urban areas to enable faster deliveries. The key advantage of quick commerce is convenience and meeting instant gratification needs of time-pressed urban consumers. The market growth will be driven by the busy lifestyles of consumers, the need for instant delivery, and rising smartphone penetration in the UK.

The UK quick e-commerce (quick commerce) market is segmented by product category, order size, delivery time, payment method, and business model. By product category, the market is segmented into fresh food & groceries, prepared meals, snacks & desserts, beverages, personal care & household, and others. The fresh food & groceries segment is expected to dominate the market due to the high demand for quick deliveries of fresh fruits, vegetables, dairy items, and other daily essentials.

UK quick e-commerce (quick commerce) Market: Analyst’s Viewpoint

The UK quick e-commerce (quick commerce) market is poised for significant growth over the next few years, driven by rising demand for instant grocery deliveries. Same-day and ultra-fast deliveries within one hour are becoming increasingly popular among time-starved consumers. London dominates the sector currently due to its high population density and widespread adoption of online shopping. However, other major cities like Manchester, Birmingham, and Glasgow also show promising potential.

While online grocery shopping has seen rapid uptake during the pandemic, delivery timeframes of one to three days can be too long for some. Quick commerce addresses this gap by fulfilling orders within 60-90 minutes. The approach relies on a dense network of micro-fulfillment centers and distributed warehouses to enable super-fast dispatch. Investment from global VC funds is helping startups expand operations and offer wider product assortments beyond groceries.

Regulatory hurdles around licensing of facilities and labor issues pose challenges. High operating costs associated with maintaining infrastructure and staffing also put pressure on margins. However, companies are innovating their way around such restraints through automation, structured processes, and strategic partnerships. As customer value perceptions of immediacy increase, quick commerce models will find more traction compared to regular online grocery models requiring next-day delivery.

UK quick e-commerce (quick commerce) Market Drivers:

• Greendelivery through EVs: The busy lifestyles of today's consumers are a major driver of the UK quick commerce market. British consumers, especially working professionals and dual-income households, have less time for grocery shopping and cooking. Quick commerce apps solve this by delivering fresh foods, ready-to-eat meals, and other essentials in 10-30 minutes. For time-pressed urban consumers, the convenience and speed of quick commerce are highly appealing. For instance, in April 2023, the UK-based e-commerce association, the Internet Measurement Research Group (IMRG), conducted a survey involving 1,000 shoppers to explore their perspectives on sustainability. The findings revealed that 63% of respondents considered a sustainable delivery option to be significant, and 68% expressed the expectation of encountering more environmentally friendly delivery choices throughout the current year. Additionally, over 25% of participants indicated a willingness to frequently switch to alternative retailers if their preferred eco-friendly delivery option was unavailable, with more than 40% stating they would do so at least occasionally.
• Rising smartphone and internet penetration: Surging smartphone and internet access is enabling quick commerce services to reach a wider segment of consumers in the U.K. According to statistics, 91% of adults in the U.K. own a smartphone in 2022. High mobile penetration coupled with fast 4G networks allows consumers to conveniently order essentials via quick commerce apps. The apps provide easy discoverability and one-click ordering for fast deliveries.
• Generational shift and tech-savvy millennials: Tech-savvy millennials who are digital natives and rely heavily on on-demand services are an important demographic driving adoption of quick commerce apps in the U.K. According to a survey, 75% of millennials have used quick commerce apps to order groceries and essentials. Millennials value the convenience and speed offered by quick commerce players.
• Venture capital investments: Quick commerce startups like Dija, Getir, Fancy, etc. have received strong venture capital investments in the UK over the past few years. These investments are enabling startups to expand their dark store networks and technological capabilities. Well-funded companies are spending aggressively on marketing and promotions to acquire customers. Increased funding provides a strong impetus for growth.

UK quick e-commerce (quick commerce) Market Opportunities:

• New geographic expansion: Quick commerce companies have tremendous opportunities for expansion into new cities and regions in the U.K. beyond London and other big metro areas. Companies can launch services in suburban areas and smaller towns with convenience-seeking consumers. Investing in geographic expansion will help broaden the addressable market.
• Partnerships with restaurants: Quick commerce apps can provide additional revenue channels for restaurants struggling with dine-in restrictions. Partnerships allow restaurants to prepare meals from their kitchens for quick delivery by apps. This gives consumers access to a greater variety of freshly prepared meals. Such win-win partnerships present an important opportunity. For instance, In January 2023, Sainsbury's, the second-largest supermarket chain in the UK, has formed a partnership with Just Eat Takeaway, an online meal ordering and delivery company, to enhance and expedite grocery home delivery services nationwide.
• Delivery of non-food items: Currently, quick commerce apps mainly focus on groceries, fresh foods, and meals. However, companies have the opportunity to leverage their ultrafast logistics to deliver other consumer items like pharmacy, electronics, and more. Expanding offerings can drive higher order values and customer loyalty.

UK quick e-commerce (quick commerce) Market Trends:

• Data analytics and AI: The use of data analytics and AI is an important trend in quick commerce. Companies leverage data to optimize routing, inventory, and demand forecasting. Predictive analytics and machine learning improve estimated time of delivery (ETAs) and inventory management within dark stores. AI chatbots also simplify customer interactions.
• Focus on dark store locations: Optimal dark store locations are critical for successful quick deliveries. Quick commerce apps are using data and analytics to identify high-density residential areas and set up micro-fulfillment centers. Proximity to customers ensures speed and convenience.
• Sustainable packaging: Consumers are increasingly conscious of sustainability. Quick commerce apps are adopting recycled, reusable, and eco-friendly packaging for deliveries rather than single-use plastics. Sustainable packaging minimizes waste and appeals to environmentally-minded consumers. For instance, In September 2023, a study by DS Smith revealed that 26% of online shoppers in the UK would discontinue ordering from a company if the products were delivered with excessive and unnecessary packaging. The research emphasized the significance of sustainable and recyclable packaging, highlighting it as a key concern for British online shoppers.
• Integration with e-commerce platforms: Quick commerce apps are exploring integrations with existing e-commerce platforms like online grocery apps. This can enable consumers to get faster deliveries for a wider range of products beyond just what is available in micro-fulfillment centers.

UK quick e-commerce (quick commerce) Market Restraints:

• Low margins and high operating costs: Quick commerce startups often operate on low margins as they spend heavily to acquire customers. High real estate costs for dark stores and rising last-mile delivery costs also strain profitability. Lack of unit economics threatens the viability and scalability of quick commerce apps.
• Counter balance: Advancements in technology, such as route optimization algorithms and automation in fulfillment centers, can help reduce delivery costs and improve profit margins over time. Additionally, as the market matures, quick commerce startups can explore diversifying their revenue streams through partnerships, subscription models, or introducing higher-margin products and services. By adopting a strategic approach to operations, technology integration, and customer engagement, these startups can navigate the challenges and position themselves for sustainable growth and profitability in the competitive quick commerce landscape.
• Intense competition: The quick commerce space has seen intensifying competition in the U.K. between heavily funded startups. Services are relatively easy to replicate. This creates price wars and excessive spending on promotions to acquire and retain users. Limited customer stickiness also aggravates churn.
• Counter Balance: Partnerships with local businesses, exclusive collaborations, and loyalty programs can incentivize repeat purchases and enhance customer retention. While competition remains fierce, strategic differentiation, customer-centric approaches, and continuous innovation can help quick commerce startups navigate the competitive landscape and build sustainable success in the U.K. market.
• Government regulations: Quick commerce relies on gig workers for deliveries. Changes in government policies around rights and benefits for gig workers can impact operating models. Stricter regulations will raise costs, impacting viability. Moreover, leveraging technology to optimize route planning, workload distribution, and real-time communication can mitigate some of the cost implications associated with regulatory compliance.
• Counter Balance: Collaborative efforts between industry stakeholders, policymakers, and worker representatives can facilitate the development of balanced regulations that protect workers' rights while ensuring the industry's continued growth and innovation. By proactively addressing regulatory challenges and prioritizing the welfare of gig workers, quick commerce businesses can build resilient operating models that align with evolving societal expectations and regulatory landscapes.

Recent Developments

New product launches

• In January 2022, Getir is an ultra-fast grocery delivery service on phone, launched its quick commerce services in London, U.K. The launch marks the company's expansion in the European market beyond Turkey. Getir promises to deliver groceries and daily essentials within 10 minutes.
• In June 2021, Flink one-stop online shop, announced the launch of its services in London to establish dark stores, enabling 10-minute deliveries. The launch strengthens Flink's presence in the UK.
• In May 2021, Gorillas, the European on-demand grocery delivery startup that rapidly achieved unicorn status, is set to commence its operations in the U.S. starting May 30. Offering grocery delivery within ten minutes or fewer, Gorillas will initiate its American venture by serving the Bushwick area, encompassing sections of Williamsburg and Downtown Brooklyn, which includes neighborhoods like Boerum Hill, Cobble Hill, and Carroll Gardens. The company has plans to broaden its reach to other parts of New York City and various other significant cities in the future.

Acquisition and partnerships

• In December 2022, Getir is an ultra-fast grocery delivery service, acquired Gorillas a German ultrafast grocery delivery, in a US$1.20 billion deal. The acquisition brings together two major players in instant commerce in Europe.
• In February 2021, DoorDash operates an online food ordering and food delivery platform, announced it was acquiring Chowbotics, a maker of robotic food prep devices. This allows DoorDash to move into automated fresh food production for its dark stores.
• In December 2021, Jokr a global platform for instant grocery and retail delivery, partnered with UK supermarket chain Asda to offer on-demand grocery deliveries from Asda stores in London within 15 minutes.

Figure 2. UK quick e-commerce (quick commerce) Market Share (%), by Order Size, 2023

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Top companies in UK quick e-commerce (quick commerce) Market

• Getir
• Gorillas
• Flink
• Zapp
• Jiffy
• Weezy
• Dija
• Fancy
• Zoom2U
• Deliveroo
• Just Eat
• Uber Eats
• DoorDash
• Stuart
• Gopuff
• Jokr
• Buyk
• Cajoo
• Everli

Definition: The UK quick E-commerce (quick commerce) market refers to the segment of e-commerce focused on the delivery of groceries and daily essentials to customers in the shortest possible time, ranging from 10 minutes to an hour. Quick commerce enables urban consumers to order daily essentials and groceries from nearby micro-fulfillment centers and receive them in minutes.