Grocery in 10 Minutes: Delivery Start-ups Crowd on City Streets


LONDON – A new entrant sprinting through central London between Uber Eats, Just Eat and Deliveroo’s bikes and scooters, promising almost instant gratification as you crave a bar of chocolate or a glass of ice cream: Getir, a Turkish company says 10 will deliver your food in minutes.

The speed with which Getir delivers through a network of neighborhood warehouses matches the staggering pace of the company’s recent expansion. After five and a half years of pioneering the model in Turkey, it suddenly opened in six European countries this year, acquired a competitor and plans to be in at least three American cities, including New York, by the end of 2021. Getir has raised nearly $1 billion in just six months to fuel the boom.

“We accelerated our plans to go to more countries because if we don’t, others will,” said Nazım Salur, founder of Getir. “A race against time.”

Mr Salur is right to look over his shoulder. In London alone, five new expedited grocery delivery companies have hit the streets in the past year. Six-year-old Spanish company Glovo, which offers grocery items as well as restaurant meals, raised more than half a billion dollars in April just a month later. gopuffBased in Philadelphia, it has raised $1.5 billion from investors, including SoftBank’s Vision Fund.

Locked home for months during the pandemic, millions of people started using online grocery delivery. Delivery subscriptions for many things, including wine, coffee, flowers and pasta. Investors seize the moment and support companies that will bring you everything you want, whether it’s diapers, frozen pizza, or a chilled bottle of champagne, in minutes, not short time.

Fast grocery delivery is the next step in the shopping wave. venture capital-backed luxury Serving a generation accustomed to ordering taxi services in minutes, vacationing in cheap villas through Airbnb, and having more entertainment on demand than ever before.

“This is not just for the rich who have money to waste,” Mr. Salur said. “This is an affordable premium,” he added. “It’s a very inexpensive way to treat yourself.”

The path to profitability in the food delivery industry has been tough. But that hasn’t stopped venture capitalists from investing nearly $14 billion in online delivery grocery businesses since the start of 2020, according to data from PitchBook. Getir has completed three funding rounds this year alone.

Is it profitable? “Yes and no,” said Mr. Salur. After a year or two, a neighborhood might be profitable, he said, meaning the company as a whole is not yet profitable.

Alex Frederick, an analyst who studies the food tech industry at PitchBook, said this industry seems to be going through a period. lightning scalingA term coined by Reid Hoffman, who helped found PayPal and co-founded LinkedIn, to describe a company competing to serve a global customer base before its competitors. Mr. Frederick added that there is currently a lot of competition between companies without much variation.

“A race to gain market share at the expense of profitability,” he said.

One of Getir’s first major investors was Michael Moritz, a billionaire venture capitalist and partner of Sequoia Capital, famous for early bets on Google, PayPal and Zappos. “I was intrigued by Fetch because I’ve yet to hear any consumer complain about getting their order delivered too quickly,” he said.

“The ten-minute delivery sounds deceptively simple, but newcomers will find that raising money is the easiest part of the job,” he said. Getir spent six years – “an eternity in our world” – solving its operational problems, he said.

Still, city streets around the world are filled with burgeoning grocery delivery services. As competition heats up, express delivery companies in London with names like Gorillas, Weezy, Dija and Zapp are offering extraordinarily high discounts. At one point, Bring offered 15 pounds (about $20.50) worth of food for just 10 pence (about 15 cents).

That’s not counting package delivery services (like Deliveroo) that are hitting grocery stores. And then there are supermarkets and corner shops that now deliver, albeit at slower speeds, and Amazon’s supermarket service.

When promotions are over, will users be able to form a strong enough habit or enough brand loyalty? The ultimate pressure for profit means that not every one of these companies will survive.

Mr. Salur says he is not afraid of competition for fast grocery delivery, as he expects to have multiple businesses in each country, such as competing supermarket chains. He is already in 43 states in America and is reportedly waiting for Gopuff. He’s asking for a valuation of $15 billion.

Entrepreneurship is a belated career move for Mr Salur, 59, after years of selling closed industrial plants. Since then, the focus has been on speed and urban logistics. He co-founded Getir in Istanbul in 2015 with two other investors, three years after he created a taxi-hailing app that gets cars to people in three minutes. In March, Getir became Turkey’s second unicorn, the term for a company worth over $1 billion, raising $300 million worth $2.6 billion to the company. Today, the company is valued at $7.5 billion.

Getir tried two ways to reach its 10-minute goal in its early days. Way 1: Stocked the company’s 300 to 400 offerings in vans that are always on the go. But customers demanded more items than the vans could fit (the company now estimates that the optimal number is around 1,500 items). Van deliveries have been stopped.

The company decided on Route 2: Deliveries via electric bikes or mopeds from a series of so-called obscure stores whose narrow aisles were lined with shelves filled with grocery items. in London, Getir has more than 30 dark stores and has started deliveries in Manchester and Birmingham. It opens around 10 stores a month in the UK and plans to open 100 stores by the end of the year. Mr Salur said more customers mean more stores, not bigger stores.

The challenge is to find properties – people need to be close to their homes – and then deal with different local authorities. For example, London is divided into 33 councils, each of which issues licenses and makes planning decisions.

Vito Parrinello, manager of several obscure stores in Battersea, southwest London, which until recently ran Italian restaurants, has determined that delivery people don’t bother their new neighbors. The dark store is under a railroad arch hidden behind a new condo. There are signs on both sides of the waiting electric scooters that read “No Smoking, No Shouting, No Loud Music”.

Inside, you hear the intermittent sound of a bell notifying staff of an incoming order. A picker chooses a basket, collects the items and puts them in bags for the rider. One wall is lined with refrigerators, one is just filled with champagne. At any given moment, two or three collectors run through the corridors, and at Battersea the atmosphere is calm and quiet, belying the fact that their movements are measured to the second. In the past day, the average time to pack an order was 103 seconds.

Shaving seconds off of a delivery requires efficiency in stores – this is not to rely on customer racing riders, Mr. Parrinello said. “I don’t even want them to feel the pressure of running on the streets,” he added.

Most of Getir’s company-wide employees are full-time employees with vacation pay and pensions, as the company eschews the gig economy model that has sued the like. Uber and delivery. But it does offer contracts for people who want flexibility or are only looking for short-term work.

“There is an idea that if this job is not contractual, it cannot work,” Mr. Salur said. “I beg you to leave, it will work.” “When you look at supermarket chains, all these other companies are hiring people and not going bankrupt,” he added.

Hiring employees instead of contractors builds loyalty, but it comes at a cost. Getir buys its products from wholesalers and then charges 5 percent to 8 percent more than in a large supermarket. Most importantly, the prices are not much more expensive than those in small local grocery stores.

Salur said that 95 percent of the dark shops in Turkey are independent dealerships, adding that he thinks this system produces better managers. It is a model that Getir can bring to new markets after it is settled further.

But it’s been a busy year. Getir was operating only in Turkey until 2021. Bring has expanded to cities in the UK this year, as well as Amsterdam, Paris and Berlin. At the beginning of July, Getir made its first acquisition: Blok, another grocery distribution company operating in Spain and Italy. It was founded just five months ago.

“This is growth, growth, growth,” Mr. Salur said. “This is what we are breathing right now.”


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