The quick commerce market - France

The quick commerce market experienced rapid growth, propelled by the Covid-19 pandemic, with an estimation that this market sector will triple in value by 2025, reaching $72 billion globally. The demand for fast grocery delivery has been integrated into the daily routines of consumers, particularly in urban areas, with a forecast of a 30% annual growth rate until 2024. Quick commerce operators are establishing themselves by leveraging dark stores to provide delivery within minutes, and cities like Paris have become battlegrounds for such companies, including Gorillas, Cajoo, and Frichti, among others.

The French population in urban areas with more than 200,000 inhabitants, accounting for 41.3% of the total, spends roughly €48.5 billion annually on FMCG/FLS products, presenting a substantial market potential for quick commerce, which is estimated to capture 5-10% of urban convenience retailing. The sector attracts young, affluent, and connected consumers, with 25-34 year-olds being particularly engaged. Despite EBITDA margins ranging between -30% and -50%, suggestive of challenges to profitability, major players have managed significant fundraising rounds, affirming traditional retailers and delivery giants' interest in this emerging market.

Trends and Dynamics of the Quick Commerce Market in France

In the evolving landscape of French retail, quick commerce is rapidly becoming a significant trend. Defined by its rapid delivery service—often within a mere 10 to 15 minutes of placing an order online—this new form of e-commerce is shaping the way consumers interact with food product delivery services. Since the entry of Uber Eats and Deliveroo into the market, there has been a consistent uptick in home delivery services extending beyond ready-made meals to include groceries. This market growth burgeoned amidst the Covid-19 pandemic and associated lockdowns, leading to a substantial shift in consumer behavior.

Many have now integrated grocery delivery into their regular routine, positioning the quick commerce market on an aggressive growth trajectory, with a yearly growth rate of about 30% expected up until 2024. In France, this surge has prompted a wave of new entrants, many vying for dominance in the express segment (delivery within 30 minutes). Underpinning their operations are "dark stores"—local warehouses or distribution centers that serve as hubs for quick order fulfillment. These entities compete not only with each other but also with conventional supermarkets in a sector turbocharged since the onset of the Covid crisis.

The market for quick commerce is entrenched in the French urban fabric, targeting the roughly 41.3% of the population residing in urban areas—estimated to be between 25 and 30 million people. It's projected that these consumers could potentially contribute to a market size ranging from approximately 2.4 to 4.8 billion euros (considering FMCG/FLS expenditure and potential market share within urban settings). Consumer demographics reveal that the typical quick commerce user is young, affluent, and digitally savvy. The 25-34 age bracket is particularly inclined towards this mode of shopping, driven by convenience and efficiency. Omnichannel consumers supplement in-store purchases with online orders, prioritizing time savings, comfort, and access to promotions.

Demand trends highlight a shift toward health and environmental awareness, especially among younger generations known as GenZ, born. There's a willingness among consumers to pay a premium for healthier and locally sourced products, illustrating the growing emphasis on sustainability and wellness in consumer choices. Quick commerce companies, in turn, face complex logistical challenges as they strive to deliver a seamless and swift service. They depend on efficient supply chain management, a robust territorial coverage facilitated by dark stores and smart management tools for real-time inventory handling. 

Quick Commerce Market: A Dive into the Disruptive Dynamics of On-Demand Delivery Startups

The quick commerce market is burgeoning as customer preferences lean heavily towards speed and convenience. With the rise of instant delivery, several startups are transforming the eCommerce landscape, ensuring that household goods make their way to consumers in a record-breaking time. Let’s explore the fresh faces and emerging titans disrupting the traditional retail model.

• Gorillas: This German-based startup is the epitome of rapid growth in the quick commerce sector. Infused with an impressive investment stream, Gorillas demonstrates the alluring potential of dark stores by promising grocery delivery within an astonishing quarter of an hour. Their presence is felt across Germany, the UK, the Netherlands, and France, showcasing an aggressive expansion strategy.
• Flink: This competitor to Gorillas has made significant strides, racing against time to carve out a substantial niche in the quick commerce market. With an eye set on swift expansion and customer satisfaction, Flink's strategy positions it to be a formidable player in the era of immediacy.
• Cajoo: Pride of France, Cajoo is swiftly climbing the ranks within its home market. With innovation at its core, the company puts a strong foot forward in the world of express delivery. The blend of local reach and mastery in logistics grants Cajoo a unique footprint in this prolific market segment.
• Dija: Crossing the channel from the UK, Dija enters the quick commerce fray with an appealing upmarket strategy. Its Dijanow app exudes an aura of modernity that aligns with the quick-paced lives of its customer base, demonstrating that refined taste need not wait for delivery.
• Frichti: A mash-up of dark kitchen and dark stores, Frichti, stands out by extending its offerings beyond groceries to pre-prepared meals. Ripe in the French market since 2015, this company synergizes meal delivery with FMCG, catering to the evolving needs of the contemporary consumer.
• Getir: A tale of international success, Getir hails from Turkey, having expanded its operations across the European frontier. The profitability vouch by Getir in its home market stands as a testament that quick commerce can indeed be a viable, sustainable model.
• Picnic: This platform takes a slightly different approach with the introduction of subscription models to the game of FMCG delivery. Their optimized twenty-minute delivery window, once booked, differentiates Picnic by offering reliability and consistency, particularly appealing in the Netherlands' organized urban landscapes. 

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 20/11/2021

Summary and extracts

List of charts

• Quick commerce market size
• Breakdown of household shopping budgets by distribution channel
• Reasons for young people to reduce their meat consumption
• Characteristics of foods for which consumers are willing to pay a premium