Gorilla, Flink, Getir & Co.: The boom in delivery services is over
quick commerce
Grocery Delivery Services: The Boom Is Over
Two cycle couriers with backpacks from food delivery service Flink.
photo: Sebastian Kahnert/dpa-gentralbuild/dpa
Delivery services like Gorilla, Flink or Getir deliver yogurt, cheese or orange juice in a matter of minutes. The question is how long?
Berlin. In the midst of the Corona crisis, they suddenly appeared: startups like Gorilla, Flink or Getir. They set up a dense network of warehouses in big cities, hired hundreds of drivers and promised to deliver supermarket products like cold cuts, drinks or frozen meals to your doorstep in minutes. Customers can use the app to order easily at supermarket prices. The segment is called Quick Commerce. Demand boomed during the crisis, and investors had plenty of money. But that has long since changed.
“In 2021, accelerated commerce was the theme that most went through the roof in retail,” says Kai Hudetz, managing director of the Institute for Retail Research in Cologne (IFH). “Even at that time, you had to seriously question whether bringing a pot of yogurt to your desk in fifteen minutes could be a working business model.”
Meanwhile, the industry is also feeling the effects of the end of the Corona sanctions, the effects of high inflation and the war in Ukraine. The demand for online groceries has reduced significantly. According to Hudetz, investors are more cautious. Some delivery services that rely on rapid growth are now in trouble. For example, Berlin start-up Gorilla announced just a few months ago that it would cut hundreds of administrative jobs and recently left some locations in North Rhine-Westphalia.
heavy competitive pressure
Competitor Vault actually does its core business with restaurant delivery. But the most recent experiment with supermarket products – some from warehouses – has now ended.
Given the many players in the market, the competitive pressure is high, and maintaining our own warehouses is expensive. Also there is the confidence of employees, who are increasingly successful in their fight for better pay, safer working conditions and work councils. Skating prices is risky. “As soon as the delivery fee is charged, the customer often walks 300 meters to the supermarket and buys what he needs or orders from a cheaper competitor,” Hudetz says.
Still, companies have little choice. According to Flink, they now offer free delivery from a shopping cart size of just 50 euros. Everyone has said goodbye to the promise of once-ten-minute delivery. Gorilla and Flink only advertise that they will be at the door “within minutes”.
204 billion euros in food sales
IFH trade expert Hudetz says the market is consolidating, some companies will give up, others will stay. But the offer won’t go away. The growth potential remains very high. According to the German Trade Association (HDE), the retail trade generated 204 billion euros in sales last year. Online share was only 2.4 percent.
Solvent competitors are positioning themselves. Delivery company Takeaway has dominated the market for restaurant delivery in Germany for years with its Lieferando brand. A few days ago Lieferando set up his own warehouse for groceries in Berlin-Charlottenburg. From there, more than 1000 products of local brands are now being delivered to the customers on trial basis.
Volt hasn’t even given up on the food segment, only changing the concept. Instead of setting up an expensive warehouse infrastructure, the company is now collaborating with local supermarkets, from whose branches goods are picked up and distributed. Large retail chains such as Reeve or Edeka have also been associated with their services for some time.
Reeve Flink. have also invested in
For example, Rieve has invested in start-up Flink apart from its range. French retail giant Carrefour is also on board after Flink took over local competitor Cashew. With such business partners, the start-up sees itself as well prepared for the changing market and is on the lookout for further acquisition opportunities: “We are watching this very closely,” a spokesperson said. “We have cash available.”
For consumers, this could mean a change soon. Trade expert Hudetz says that delivery will take longer and will also become more expensive. “They have to say goodbye to the promises of ten-minute delivery for all and free. It will be a premium service.”
