How Vinculum Helped To Grow Top Quick Commerce Brands in India
Quick commerce, or “q commerce,” is the current evolution of e-commerce, and it is all about the speed of delivery, which ranges from 15 minutes to an hour. Quick commerce is typically used for small and daily orders such as milk, fresh vegetables, orders that are required suddenly in the spur of the moment such as a late evening urge for ice cream and when friends show up suddenly, or for orders that serve consumer needs for no more than a week such as weekly supply of provisions.
The growth of quick commerce can be attributed to:
- The COVID pandemic when the essentials were still required, and people avoided going into stores.
- Busy lifestyles in urban areas and smaller households who preferred convenience and speed in getting daily and weekly essentials.
Quick commerce companies attracted a lot of interest among the venture capitalist community and have raised significant amounts of capital. The graph shown below indicates the amounts raised by many of the companies involved.
Majety, CEO of Swiggy Group, that owns the quick commerce brand Instamart indicated recently on the sidelines of the World Economic Forum at Davos that Instamart revenues are increasing and that the quick commerce brand is the growth driver for the overall group. Similar sentiments are echoed by Deepinder Goyal, CEO of Zomato Group, which owns Blinkit, another important quick commerce company in India. Both have said that their quick commerce brands will contribute more in revenues than their food delivery operations in the coming years.
Quick commerce companies inherently face challenges in making money due to significant upfront investments needed to ensure quick deliveries and lower margin FMCG goods. The more successful of the quick commerce companies have sought opportunities to introduce higher margin white-label products, monetizing their sales data and running campaigns for their FMCG principal for a revenue share of the sales.
There are three essential elements of any quick commerce order from the time it is placed to the time it is fulfilled. The steps (Fig 1) include the order placed on a website or app, dark stores (where the inventory is typically kept for the assortment that can be ordered) and delivery partners who ensure the delivery to the customer.
Fig 1 Key Steps in an order flow for quick commerce brands.
Vinculum provides software to manage the critical steps mentioned in Fig 1 to facilitate a quick commerce player to manage their operations successfully.
Vin OMS (Vinculum Order Management System) helps consolidate the orders received via the website or the mobile app to a centralized repository and using predefined rules can route the orders to the appropriate warehouse or storage location using parameters such as nearest location, lowest delivery cost, inventory levels at the warehouse, city where it should be delivered etc. Vin OMS can also suggest an alternative warehouse from where the orders can be fulfilled should that become necessary. In addition, Vin OMS allows orders to be split into two or more orders depending on availability of inventory at the warehouse. This facilitates the management of order in a seamless manner for the operations to handle it.
Vin WMS (Vinculum Warehouse Management System) is a robust inventory management software that can be used at both the mother warehouse and the dark stores to manage the following:
● Inbound of goods from vendors into the mother warehouse or inbound of goods from mother warehouse to dark stores.
● Put away of goods in the mother warehouse or the dark stores. Vin WMS allows for predefined put away rules so that the movement of goods into a specified location or zone can be done in a planned manner according to the rules specified.
● Manage inventory across the various zones and locations in the warehouse and handle inventory aging and reports associated with it.
● When orders are received at the mother warehouse from the dark stores, a pick list will be triggered to pick from the assigned locations in the mother warehouse. Similarly, when the orders are received at the dark stores, a pick list is generated so that it can be picked, packed, and shipped. In both cases, the inventory levels are accurately monitored and when needed, stock transfers can happen from the mother warehouse to the dark stores based on parameters that can be set and in the case of the mother warehouse, orders can be placed with vendors based on preconfigured parameters either automatically or generated for review before submission.
Vin OMS and Vin WMS software working seamlessly give visibility of the number of SKU available in each dark store, mother warehouse and the number of orders that can be processed comfortably before a stock transfer from the mother warehouse or another dark store needs to be triggered and in the case of the mother warehouse, when items have to be reordered to meet the order stream from the customers.
Using Vinculum’s Vin OMS and Vin WMS, a quick commerce player can easily manage the SKU in both the mother warehouse and the dark stores and can easily fulfill orders placed by the customer efficiently and quickly.
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