Europe Quick Commerce Market Outlook, 2029

Europe Quick Commerce Market Outlook, 2029

Within the fast-moving environment of European retail, where truly time is money, quick commerce has raced one step ahead in speed and convenience. At the same time, technological innovation lies at the core of European quick commerce. AI and machine learning make optimum resources available from demand forecasting to route planning. Automation within warehouses enables speedy picking and packing processes. Not stopping here, companies are trying out advanced delivery methods like drones and self-drive vehicles that will take the speed and efficiency of delivery to a different level altogether. Another large theme in the quick commerce space is that of sustainability. The trend of companies toward eco-friendly measures such as electric vehicles for delivery, reduction of wastage in packaging material, carbon offset programs, and more, is only increasing. Indeed, the shift to greener operations aligns squarely with changing consumer expectations about the environment and responsible business practices. Notably, quick commerce operations are made efficient by their very integration with new technologies such as 5G and IoT. 5G will increase the pace of transmissions and the real-time tracing of items, while IoT devices make inventory management better and logistics more optimized. One critical issue to be faced is that they operate in a very complicated, country-by-country varying regulatory environment in Europe. The set of regulations dictates the labor laws, consumer protection, and food safety. Given the collection of huge consumers' information, adhering to these data protection laws, such as the General Data Protection Regulation, is very critical. There are locals around delivery vehicles and operational hours that affect how companies are to handle logistics and their operations. Most of the time, this calls for adjusting the practices to different regulatory standards across the continent. A mix of established players and new entrants characterizes the European quick commerce market. Start-ups most notably Gorillas and Flink are offering rapid delivery services in major metropolitan locations such as Berlin and London. For instance, in June 2023, Getir, a quick commerce delivery service company, announced its intention to leave France.

According to the research report ""Europe Quick Commerce Market Outlook, 2029,"" published by Bonafide Research, the Europe Quick Commerce market is anticipated to add to more than USD 36 Billion by 2024–29. As such, the factor of convenience appears more important to European consumers than the cost. Indeed, as many customers are ready to pay more for convenience in fast delivery, demand for premium services with shorter turnaround times increases. There is an increased demand for frictionless and highly-personalised shopping experiences. Consumers are beating a path to the door of platforms that have intuitive interfaces, real-time updates, and offer personal recommendations in accordance with their shopping history and preferences. Consumers show more interest in locally sourced products. Quick commerce companies are rising to this challenge by partnering with local businesses and producers of fresh, regionally relevant products. Coupled with very jammed traffic and a lack of parking, logistics in an urban environment become difficult to deal with. A second aspect impacting profitability is the great expense operational for rapid delivery essentially, the high labor, transport, and technology investing costs. In this regard, companies should be able to balance such rising expenses through price strategies and efficiency improvements in order to remain financially viable. The major investors in the quick commerce market in Europe have been venture capital and private equity firms. These investments result in innovation, expansion in operations, and technological advancement. For instance, in October 2022, Delivery Hero SE, an online food ordering company based in Germany, has collaborated with CitrusAd, an e-commerce ad-serving platform, based in Australia, to introduce Self-Service Quick Commerce Advertising Solutions.

Market Drivers

• High Consumer Expectations: In Europe, high consumer expectations are a major driver of the quick commerce market. European consumers are accustomed to high-quality services and have come to expect rapid and reliable delivery of goods. This expectation is particularly strong in urban areas, where consumers demand fast access to a wide range of products, from groceries to pharmaceuticals. Companies operating in Europe are investing heavily in technology and logistics to meet these expectations, offering delivery times as short as 10-15 minutes in some cities. The emphasis on customer satisfaction and convenience is driving the growth of the quick commerce sector across the continent.
• Regulatory Support and Digital Infrastructure: Regulatory support and well-developed digital infrastructure are key drivers of the quick commerce market in Europe. Governments across the region have implemented policies that promote digital innovation, e-commerce growth, and sustainable practices. The widespread availability of high-speed internet and advanced payment systems facilitates seamless online shopping and quick delivery services. European cities are well-connected, with efficient transportation networks that support rapid last-mile delivery. Companies are leveraging these favorable conditions to expand their operations, offering a wide range of products with fast delivery times, thereby driving the growth of the quick commerce market.

Market Challenges

• Regulatory Compliance and Sustainability: Regulatory compliance and sustainability are significant challenges for the quick commerce market in Europe. The region has stringent regulations related to data privacy, labor rights, and environmental impact, which companies must adhere to. These regulations can increase operational costs and complexity, particularly for smaller players. The growing emphasis on sustainability requires companies to adopt eco-friendly practices, such as using electric vehicles for delivery and reducing packaging waste. Failure to comply with these regulations can result in penalties and damage to brand reputation. Companies must navigate the regulatory landscape carefully while addressing consumer demands for sustainable practices.
• Competition and Market Saturation: The quick commerce market in Europe is facing intense competition and market saturation, particularly in major cities like London, Paris, and Berlin. Numerous players, both local and international, are vying for market share, leading to aggressive pricing strategies and extensive promotional campaigns. This intense competition can erode profit margins and make it difficult for companies to differentiate themselves. As the market becomes saturated, companies must constantly innovate to retain customers and attract new ones. This challenge is compounded by the high cost of logistics and last-mile delivery in densely populated urban areas, where competition is most fierce.

Market Trends

• Focus on Sustainability and Green Logistics: In Europe, there is a growing trend towards sustainability and green logistics in the quick commerce market. Companies are increasingly adopting eco-friendly practices to meet the region's stringent environmental regulations and respond to consumer demand for sustainable products and services. This includes the use of electric vehicles, bike couriers, and carbon-neutral delivery options. Companies are focusing on reducing packaging waste and sourcing products locally to minimize their carbon footprint. This trend is not only driven by regulatory requirements but by the desire to build a positive brand image and gain a competitive edge in a market that values sustainability.
• Hyperlocalization and Community Engagement: Hyperlocalization and community engagement are emerging trends in the European quick commerce market. Companies are increasingly tailoring their offerings to the specific needs and preferences of local communities. This includes partnering with local businesses, offering locally sourced products, and providing services in multiple languages. Hyperlocalization allows companies to build stronger relationships with customers and gain a deeper understanding of local market dynamics. The community engagement initiatives, such as supporting local events and charities, help companies build brand loyalty and differentiate themselves from competitors. This trend is expected to continue as companies seek to create more personalized and meaningful connections with consumers.

Food & Groceries is leading in the European quick commerce market due to the increasing demand for convenience and immediate delivery solutions, driven by urbanization and evolving consumer behaviors.

The fast-paced lifestyle in European cities has led consumers to prioritize time-saving and efficient shopping experiences, making quick commerce an attractive option. In Europe, Food & Groceries is an ideal fit for quick commerce due to the frequent and essential nature of these purchases. Traditional grocery shopping can be inconvenient, requiring trips to stores, waiting in queues, and carrying heavy bags. Quick commerce platforms address these pain points by offering a broad assortment of products, ranging from fresh produce to daily essentials, delivered to consumers' doorsteps within minutes. This convenience is particularly valued by busy urban dwellers, young professionals, and families who juggle multiple responsibilities. The COVID-19 pandemic has further accelerated the adoption of online grocery shopping, as consumers sought safer and more convenient alternatives to in-store shopping. This shift in behavior has fueled the growth of quick commerce services, with numerous startups and established retailers investing in rapid delivery infrastructure. Europe's dense urban population and compact city layouts facilitate efficient and swift delivery, making it a favorable market for quick commerce.

Online is leading the quick commerce market in Europe is due to the increasing consumer demand for convenience and rapid delivery services, particularly in urban areas.

The quick commerce sector, characterized by the delivery of groceries and daily essentials within a remarkably short timeframe often as little as 10 to 30 minutes has gained significant traction in Europe, especially during and after the COVID-19 pandemic. This shift in consumer behavior is primarily driven by the growing trend of on-demand services, where consumers seek immediate access to products without the hassle of traditional shopping. The pandemic accelerated this demand as lockdowns and social distancing measures forced consumers to adapt to online shopping, leading to a surge in e-commerce and delivery service usage. The growth is particularly evident in countries like the United Kingdom, France, and Germany, where urbanization and high disposable incomes contribute to a favorable environment for quick commerce services. Urban consumers, often with busy lifestyles, are increasingly turning to quick commerce for their grocery needs, as evidenced by surveys showing that a significant portion of users now rely on these services for their weekly shopping. The competitive landscape has evolved, with numerous startups entering the market, although some have exited due to challenging unit economics and the high costs associated with rapid delivery. Remaining players like Gopuff, Flink, and Zapp are focusing on optimizing their operations and leveraging existing delivery networks to enhance efficiency and reduce costs. The presence of established food delivery companies, such as Deliveroo and Uber Eats, venturing into grocery delivery further intensifies competition, as they can utilize their extensive customer bases and lower customer acquisition costs to capture market share.

The application-based operations are leading in the European quick commerce market is due to their ability to cater to the diverse and fragmented nature of the European market while providing a standardized, efficient service across multiple countries and cultures.

Europe's quick commerce scene is characterized by its heterogeneity, with each country having distinct consumer preferences, regulatory environments, and competitive landscapes. App-based platforms have proven remarkably adept at addressing this complexity while maintaining a consistent user experience. One of the key strengths of app-based operations in Europe is their ability to localize services while leveraging a centralized technological infrastructure. These platforms can easily adapt their interfaces, product offerings, and marketing strategies to suit local languages, cultures, and preferences, all while running on a unified backend system. This approach allows them to achieve economies of scale in technology development and maintenance, while still providing a tailored experience for each market they serve. The European market has seen a rapid shift towards mobile-first consumer behavior, particularly among younger demographics. App-based quick commerce aligns perfectly with this trend, offering a seamless mobile experience that integrates shopping, payment, and delivery tracking in one platform. The convenience of having a virtual store in one's pocket resonates strongly with European consumers who increasingly value time-saving solutions in their busy urban lives. The success of app-based operations in Europe is the continent's strong focus on data privacy and security. European regulations like GDPR have set high standards for data protection, and app-based platforms have responded by implementing robust security measures. This has helped build trust among European consumers, who are often more cautious about sharing personal information online compared to their North American counterparts. The flexibility of app-based operations has proven crucial in adapting to Europe's varied urban landscapes. From the dense city centers of Paris and London to the more spread-out suburbs of German cities, these platforms can adjust their delivery models and logistics strategies to suit different urban environments.

The UK is a big market for the European quick commerce sector is its well-established e-commerce market and suitable business environment that have helped quick commerce companies to prosper easily.

The UK presents a very mature e-commerce market, crossing a value of over £70 billion in 2020 and ranking among the largest e-commerce markets in the European region. This has helped set a very strong base for the growth of quick commerce, as many consumers are already comfortable shopping online and expecting fast and convenient delivery options. The friendly business environment in the UK with, by comparative standards, low regulatory burden and highly developed logistics infrastructure offered an attractive market in which quick commerce companies could operate. The rise of urbanization and fast pace of life in the UK has contributed to quick commerce demand, as most consumers look for ways in which they can conveniently and easily save time on their daily shopping activities. The already existing players, like Ocado, Tesco, and Sainsbury's, that have put a lot of investment into e-commerce capabilities and logistics, have helped build momentum for quick commerce in the UK. The high penetration of smartphones in the UK, combined with high digital payment adoption rates, has made it quite easy for consumers to shop online and receive quick commerce services.

• In January 2022, Flink launched its services in Italy, its first market outside Germany, to tap into the US$ 264.57 billion Italian grocery market with its 10-minute delivery proposition.
• In November 2021, Gorillas rolled out its on-demand grocery delivery services in New York City as part of its U.S. expansion strategy. It aims to differentiate itself on ultra-fast delivery in the competitive New York market.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Quick Commerce market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Product Type
• Food & Groceries
• Stationary
• Personal Care Items
• Small Electronics & Accessories
• Others (Pets, alcohol, gifts & flowers, Medicines)

By Payment Mode
• Cash on Delivery
• Online

By Technology
• Application Based Operation
• Hybrid Operation
• Website Based Operation

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Quick Commerce industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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