In this episode, we dive into the world of quick commerce – also known as “insta shopping” or “near field commerce” by our insights team. In markets like China and India, companies are starting to set their delivery goals within 15 to 30 minutes.
We break down what really happens behind the scenes after an order is placed on your smartphones: the logistics, the tech, and the very different operation models behind 15 minute vs 30 minute deliveries. Are 15 minute deliveries even feasible? What challenge do platforms, merchants and riders face in making it work? Will 15 minute delivery become the future of ecommerce?
00:01:00 – What exactly is quick commerce and what are the expectations around the world?
00:03:05 – Insights from inside a dark store
00:06:20 – How does the platform choose to prioritise online orders, or physical shoppers?
00:09:00 – What are the struggles the riders are facing?
00:13:00 – Are 15 minute deliveries feasible?
Also available on Spotify and Apple Podcast
[AI-generated Transcript]
[00:00:00] Phyllis: Hi everyone. Welcome back to another episode of the Impulso podcast. Today we are joined by our insights team, Tengian and Weihan. It’s Ian’s first time on our podcast, but it definitely won’t be her last.
[00:00:11] Tengian: That’s why I’m a bit nervous.
[00:00:14] Phyllis: Okay. So, um, how old do you guys expect to normally get your deliveries?
[00:00:18] Weihan: I feel like if you are talking about e-commerce right? Or Singapore deliveries, I think the fastest I can get it within like a day now.
[00:00:25] Tengian: Really? Last time I ordered on shop maybe two weeks ago, and then it was supposed to deliver by two to three days, and then I wait for like five days and receive a 2 2 2 box voucher.
[00:00:38] Tengian: Instead
[00:00:38] Weihan: it’s actually quite, quite common to have it delivered within in Singapore. And then it only comes like within, after a week or so.
[00:00:44] Phyllis: But over lunch that day we were talking about how people in other countries like China or even India, they’re expecting to get their deliveries in a much faster time.
[00:00:53] Phyllis: And we are talking about like minutes.
[00:00:55] Tengian: Yeah. They expect to receive the, uh, the thing, the, the [00:01:00] staff by 10 to 15 minutes, I
[00:01:02] Phyllis: guess. 10 to 15 minutes. Yes.
[00:01:04] Tengian: Yes. That’s very short.
[00:01:06] Phyllis: So that wouldn’t be called E-commerce anymore. Right? It would be quick commerce. Yeah.
[00:01:11] Tengian: Very quick.
[00:01:12] Phyllis: And you guys were telling me something about nearfield commerce. What, what’s Nearfield Commerce?
[00:01:17] Weihan: So near field basically is anything that you can get it within um, minutes. Most of the time it’s like under an hour for the case of China. And then
[00:01:26] Tengian: I think maybe 30 minutes. Yeah, 30 hours. Yeah, 30 to an hour.
[00:01:30] Weihan: Yeah. Yeah. But that’s how you can see as near few e-commerce, but essentially near few E-commerce, quick commerce, or even insert shopping.
[00:01:38] Weihan: I just. A lot of different terms that people use to coin this fast delivery of this kind of goods.
[00:01:44] Phyllis: We thought about 15 minutes, but then when you think about the process, it. Is I, I’m the person that’s ordering, so I’ll send an order and then the writer has to collect my order and it has to send it back to me.
[00:01:54] Phyllis: What happens behind every process and it’s 15 or even 30 minutes even really [00:02:00] possible,
[00:02:01] Weihan: I think for consumers, right? It’s very easy for us to expect like, yeah, I want fast. If you look behind the scenes, right, it’s actually not that simple because for us, right?
[00:02:09] Weihan: We just need to press a button, send my order, and then the platform receives it. Then afterwards, what it happens is the platform will then send out this, um, order to two parties. Piece. So namely the riders as well as like the merchants or the stores that are handling the packing of the orders. So these are the two main people that would be processing your orders.
[00:02:30] Weihan: And obviously when you have two parties involved, right then there’s gonna be a lot of different operations, a lot of complications behind it. If we look at stores, you have two main models as well. You have your duck stores. Which are basically, most of the times not being public facing.
[00:02:47] Weihan: They’re like mini warehouses. And you also have the physical retail shops where you still have customers going into the stores and buying things. So these two stores will have very different operations again.
[00:02:58] Weihan: Once a store gets an [00:03:00] order, right, then they will have to have people to help them to number one, pick the order. And then afterwards you have people then have to pick the order and then you have someone to have to put it at a place where the writers can collect it.
[00:03:13] Weihan: We have been to a couple of duck stores ourselves, and Tony actually has seen quite a few herself because during our past immersions, so I think she had a lot of like idea of what exactly goes on in the duck store and what are the applications behind it.
[00:03:28] Phyllis: Speaking about duck stores, right? I know that in China there are about 300 square meters, 300 meters square, and then it is 10,000 SKUs. So. It is very packed and it’s a very small place. Mm-hmm. Do you actually see when you went to China, like people packing the orders?
[00:03:44] Tengian: Uh, I think we went to one duck store, which is called the duck store is quite big and there are a lot of, there are different sections like fish, seafood, maybe fish. Is it live Fish?
[00:03:56] Tengian: Yes. Live fish. Mm-hmm. And they’re all put in the water tank. [00:04:00] So for this, I remember it’s the rider itself. To pick the fish, to get the fish from the water and then put it on the, to wait it and then to, to pack it. Yes. But for others, like veggies, flowers, or some groceries, necessity, there are specific, uh, stuff.
[00:04:17] Tengian: Stuff to pick, to pack all this. Yes.
[00:04:20] Phyllis: So live fish is rider picking the live fish button for others? Is Packers packing it?
[00:04:26] Tengian: I think so.
[00:04:27] Phyllis: So then this is also another operation like thing that they have to think about. Right? How do they place the good so as to optimize the timing? Because to riders is all about timing.
[00:04:37] Phyllis: And I mean, if we’re talking about receiving the order in 15 minutes, everything has to be very, very efficient every step of the way.
[00:04:44] Tengian: Yeah. And also in terms of packaging, uh, there are different package for different categories like ice cream. Right. And then you, you need to keep it, keep it solid. Cannot make it melt.
[00:04:54] Tengian: And the fish we just mentioned, it’s not just use a plastic bag to hold it and put the water inside.
[00:04:59] Tengian: [00:05:00] There is a special box for fish only.
[00:05:03] Phyllis: I was watching No, recommended us to watch a movie called Upstream. It’s basically a movie about a, a white collar guy in China. He was a programmer, but then he got fired and then he went on to become a, a rider, a delivery rider. So then the show shows a lot about what are the problems that these riders face.
[00:05:20] Phyllis: So one of these problems that he faced was actually like when he went to the duck store. It’s very, very confusing. So there are a lot of orders like. You went to a flower shop on Mother’s Day, right?
[00:05:31] Tengian: Uh, yes.
[00:05:31] Phyllis: So then I assume that there will have to be a lot of orders, so the writers also. Yeah,
[00:05:37] Tengian: so, uh, so there’s also a problem, but the flower store is very like, uh, industrialized.
[00:05:44] Tengian: Like they separate just like the whole production line. They separate into different process. There’s, uh, a few people that, uh.
[00:05:55] Phyllis: That like they are packing and then a few people picking the flowers. Yes.
[00:05:59] Tengian: [00:06:00] Yes. And one people is just in charge of a few categories, a few types of flowers, but not whole. All, all the flowers.
[00:06:07] Phyllis: So the whole process is very structured. Yes. So everything has to be very efficient, right? Yeah. So then there’s the problem for duck stores. Everything has to be very efficient. One person has to do this, one person has to do this, and then the rider come in, picks the order and just leaves.
[00:06:20] Phyllis: But what about physical stores?
[00:06:22] Weihan: I think if you look at physical stores, and I mean we are all customers ourselves. Mm. So when you go to a physical store, you expect, like, let’s say the store attendant to be able to help you with all your, if you can’t, you can’t find something, you hope that someone would help you with that.
[00:06:37] Weihan: Now, imagine that this store attendant now also has to pack for a, an order coming from the online site. Yeah. So then it comes the question like, oh, do I pick it up from right where the customers are, so from the, um, display shelves, or do I need to go back to take it directly from inventory or whatsoever?
[00:06:54] Weihan: So these are things that you have to iron out before you can even allow for quick [00:07:00] commerce to open. And then there’s a second concern. Is that where do the riders come in from? Yes. Do they come in from the front door where they will have to face all the customers and add, like, let’s say if people are lining up, then there’ll be a certain disruption, or do they have, or does the store have an additional like back door or a separate section where writers can just simply go there, pick up the order, and.
[00:07:23] Phyllis: Yeah, exactly.
[00:07:24] Phyllis: In the show, the, the main character, he went to a mall and then he was supposed to collect something, but then the security guard told him that, oh, you cannot enter through this entrance because like they have a special entrance for riders.
[00:07:34] Phyllis: I dunno if it’s for crowd control, or maybe it’s for like the image of the mall, but then that obviously adds extra time. And if the rider is not familiar, then it’s even more time. Right.
[00:07:45] Weihan: So after the rider picks up an order, then there’s a lot of things that a rider, him or herself would have to consider.
[00:07:52] Weihan: So firstly is where is the fastest route for me? Yes. So that I can get to the customer as soon as possible, and a [00:08:00] lot of times, sometimes.
[00:08:01] Weihan: The GPS mapping system might not even be the best. Yes. So riders themself picking up an order. They have to be very, um, knowledgeable about the area that they’re in. Then you know where the shortcuts are or where there are road closures today. So that’s the first thing. Right. The next thing you, your concern of is like, how do I do it safely?
[00:08:20] Weihan: Right. I don’t want to get myself injured. I don’t want to knock into some somewhere and maybe let’s even damage the goods. Yeah.
[00:08:26] Weihan: And then when I meet the customers, I still have to put on a smile and say, hi, miss time is, here’s your, here’s your group. And then you smile. Because a lot of them, I think, if I’m not wrong, right. Um, my perception of how a lot of these writers is that they cannot have a bad review on Yes. Their performance is not their, uh, markdown and then it will affect how much their pay they earn.
[00:08:49] Phyllis: Do you know how much they’re affected? Like their p
[00:08:52] Tengian: In 2024, they will be deducted if they, uh, deliver over time. Yeah. And also if [00:09:00] the consumer give them low rating, then they will. I don’t think they would directly, uh, deduct the, the, the pay.
[00:09:07] Tengian: But they will be like, what Han said will be marked in the system in the rating, and it cannot be too low. You have to do something to, to make your, your rate higher.
[00:09:16] Phyllis: So like in a movie when the rider has a bad rating, so for example he reaches maybe three to five minutes late because he is unable to find a place because in certain places the GPS system is not as accurate or the area is not very structured. Right. So for example, uh, house number 39 is not next to house number 38 is, is very far away.
[00:09:36] Phyllis: Yeah. So what happened to him was. There was a bad rating, which pushes down the overall teams rating. And then when they leave a bad review, his pay actually gets deducted. Yes,
yes.
[00:09:46] Phyllis: And then at the end of the day, he realized that instead of earning money, he still has to pay.
[00:09:50] Phyllis: He still has to pay penalties because of late deliveries and customer bad reviews. So then apart from the time they also have to juggle to put on a smile on their [00:10:00] face and to also face, the customers like to do extra stuff. At one point in the movie, I’m sure this exaggerated, but he even started cooking for the restaurants.
[00:10:09] Phyllis: Like he started cooking and then he started like
[00:10:11] Tengian: the restaurants too slower. Yeah.
[00:10:13] Phyllis: So there’s also another problem that they have to face, right? Because if the restaurant is too slow, then the restaurant is the bottleneck, not them.
[00:10:20] Tengian: Yeah, yeah. But they
[00:10:20] Weihan: have to
[00:10:20] Tengian: better run. Yeah, exactly. Oh, I also want to add on one word.
[00:10:24] Tengian: Usually it’s like in China it is maybe four to five ones during peak hours. So although the, the system will design, recommend a fast route for them, but you also need to like look at the GPS and then plan your time.
[00:10:39] Tengian: So this will make them do even a lot more things. And for example, like DDL, for every rider, they need to carry eight maximum, maximum eight orders at a, at a time,
[00:10:52] Phyllis: So all these are on demand orders as well, like,
[00:10:55] Weihan: yes.
[00:10:55] Phyllis: And they have to send all these orders within 15 minutes.
[00:10:59] Weihan: I [00:11:00] think they aspire to send it within like 30, 39, 30 minutes. But in actual fact, it’s probably more than that. Because when you have more orders, you have to go to, let’s say the same store with, for the same store tenant to pack like eight orders.
[00:11:12] Weihan: Yes. And then you have to send that eight orders..
[00:11:14] Phyllis: for DDL, right, I know that their goal is 29 minutes for quick commerce, but then their actual service is. Around 34 minutes. So the logic behind there are riders carrying more stuff is that of course you’re save on the cost because the riders don’t have to keep traveling.
[00:11:29] Phyllis: When they take like eight orders, it’s all from the same like physical store or the dark store, then they head out to eight different people, eight different consumers.
[00:11:38] Weihan: I think it really depends on how the platform helps to match the rider to the orders as well. Mm. So if you want to have it fast sometimes, or most of the times, um, for so many orders, the rider is often already near or at.
[00:11:56] Weihan: The location. Mm. So it’s the rider just going to one place, they cut [00:12:00]everything and then dispatch the orders. And if I’m not wrong, most of this, um, platforms would make sure that the orders are relatively in close proximity to each other, such that it makes it.
[00:12:11] Weihan: It physically possible for the riders to deliver the, the in orders to all their consumers, consumers within the set period of time. So there’s a lot of optimization in terms of the backend that most of us consumers don’t really see.
[00:12:26] Phyllis: Yeah. So for all this, we’re talking about like 30 minutes and things like that, but just now Tania mentioned that people in India actually expect it within 15 minutes.
[00:12:36] Phyllis: Yesterday, um, said this would be possible but only feasible within like very, very small and close cities. And also when the riders are already near the physical stores or riders are already at the physical stores or the dark stores. So is that like another model, like writers have to be at the duck store where they receive the order, then they send it out?
[00:12:58] Tengian: Yeah, I think the setup for [00:13:00] 15 minutes delivery and the setup for 30 minutes delivery is totally different. Mm. Like for for 15, you cannot go to a shopping mall or a Yes supermarket to get your stuff. Right. Right. And then you have to go to the duck store, and usually the duck store will be the intensity.
[00:13:16] Tengian: Intensity in the city will be hired. So to minimize the more dense in the city. Yeah. To reduce the distance. Mm. And also, you just mentioned the rider need to stay in store. Yes. To reduce the time. They, they travel to the, to the dark stores. So I think these things are need to take into consideration when you are designing for it.
[00:13:37] Tengian: Like very short, very, uh, yeah. 15 minute delivery.
[00:13:42] Phyllis: The setup for this 15 minutes and 30 minutes would be very different. So, so the riders, after they deliver it, then they’ll just go back to the duck store and wait for orders.
[00:13:53] Tengian: I think that will be the best case.
[00:13:56] Phyllis: But then for these kinds of cases, the consumers also have to be different [00:14:00]because then it will mean that they constantly have to receive orders.
[00:14:03] Phyllis: Right.
[00:14:04] Weihan: You mean concern you have to place orders.
[00:14:06] Phyllis: Yeah as in like. There has to be a large enough population such that orders are constantly coming in so that the riders are not just waiting there.
[00:14:14] Phyllis: For this whole thing to work, there actually has to be enough volume as well, right? Mm-hmm. And enough like supplier of riders. So for example, in Singapore, I think our problem is that we don’t have enough riders, but we have more orders.
[00:14:27] Phyllis: Yeah. But for places like China, India, I know that they have an oversupply of riders, so people are actually fighting to become riders and it’s highly competitive. Yes. Yeah.
[00:14:36] Tengian: And I, I know that there is a rider or older building system. It’s like, it’s not totally platform Dispatching orders the riders. You need to, you need to grab the order, you need to feed the order.
[00:14:46] Tengian: So it’s called, right? Yes. Yeah. Yes. And I remember, uh, when I was in the DDO doc store, there is a panel, there’s a screen that write record all the, uh, all the riders. So you can see there’s one column is how, [00:15:00] uh, how many writers are there in the store waiting for collecting orders. And then there’s, there’s another column is how many writers are sending out delivery.
[00:15:09] Tengian: So I also know when there is peak hours. Uh, and then DDO need more riders. They will call, call back the part-time riders to join them
[00:15:19] Phyllis: so this is not something that’s possible in Singapore because like, like we both know, right?
[00:15:23] Phyllis: There is a shortage on supply rider in Singapore.
[00:15:26] Weihan: Yes. Maybe you need to gamify it so that people are. I heard that if, if I’m not wrong, um, they actually have a board to say, oh, who is the power?
[00:15:35] Phyllis: Oh, yeah. That’s what happens in the show. Like, yeah,
[00:15:37] Weihan: yeah, yeah. For the show they have, uh,
[00:15:39] Phyllis: true. So they have different tiers of rider.
[00:15:41] Phyllis: I think this is something that the store manager gave me, fa to incentivize rider, and then the top rider in the show allegedly earn 16,000 r and BA month, which we supposed have to be about 3000 plus thing.. After speaking about all this, right? It, the operations for 15 minutes [00:16:00]delivery and 30 minutes delivery is very different.
[00:16:02] Phyllis: Yes. But is it really feasible?
[00:16:05] Tengian: Mm. 15 minutes, I think in China is a bit hard because like, like platform need to lower the cost and then usually we dispatch, uh, more than two, three orders a time. And so I think 15 minutes for consumers cannot, cannot get it.
[00:16:22] Tengian: But for India, I know, I, I think they’re trying to do that.
[00:16:26] Phyllis: So ultimately we go back to the, when we talk about e-commerce and quick commerce. 15 minutes or 30 minutes is about the quiet, right? Yes. But I know some platforms choose to focus on the to instead.
[00:16:40] Tengian: Yes. Yes.
[00:16:41] Tengian: So I remember there’s someone saying that this. An expert saying that, uh, he will buy everything on Tao except diapers because he trust the, uh, the product quality of jd. Wow.
[00:16:57] Phyllis: That’s
[00:16:58] Tengian: very interesting.
[00:16:59] Phyllis: Okay, [00:17:00] so, um, that’s the end of the episode. Thank you guys for tuning into another episode of the Impulse Podcast.
[00:17:04] Phyllis: If you guys enjoyed this episode, do leave us a comment and like, and uh, share this episode. Do subscribe to stay up to date on the latest happenings and trends in the tech food delivery, new retail, and the broader digital economy.
[00:17:17] Tengian: Thank you. Bye-Bye.
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