The pandemic has put the delivery industry , which has long been the darling of investors (not exactly because it is profitable but rather because of its ability to generate buzz), in the foreground .
In the heat of the coronavirus crisis, dozens of instant delivery startups burst into the delivery industry and, once again buoyed by the buzz, managed to capture $14 billion from the pandemic. We are talking about companies such as Gorillas, Getir, Weezy, Jiffy, Gopuff, Yango Deli, Buyk, Fridge No Moore, Jokr, Voly, Market Kurly or Instacart.
However, the once buoyant delivery sector (whose profitability was to some extent a mirage) seems destined to say goodbye to the good times once and for all.
Despite the fact that in recent years they have managed to entice dozens of powerful investors, the truth is that profitability has always been rather elusive for delivery companies, which, overwhelmed by losses, have tried to survive by exerting unbearable pressure on the companies they work with, their workers and their customers (who in the current inflationary context pay increasingly expensive delivery rates).
That something is indeed fishy in the delivery sector has become clear in recent days with the demise of Gorillas . The German company specialising in ultra-fast deliveries announced just a few days ago the dismissal of 50% of its staff at its Berlin headquarters (the equivalent of 320 employees) and the slowdown of its expansion in four markets: Spain, Italy, Denmark and Belgium.
The problems of Gorillas and Getir have highlighted the risks involved in their aggressive expansion policy.
Gorillas had landed in our country with great fanfare and investing large sums of money. But it seems that the German company basically burned through its money in Spain and now, in a desperate attempt to stay afloat, it will focus on achieving the desired profitability in its five key markets (where the company obtains more than 90% of its income): Germany, France, the United Kingdom, the Netherlands and the United States.
In addition to Gorillas (which will seek to form alliances with other companies in the delivery and oman number data retail sector to survive in Spain), Getir, GoPuff and Glovo, which had recently begun to enter the ultra-fast delivery market, operate in the so-called "quick commerce" sector in our country.
One of these quick commerce companies, Getir , also announced this week that it will be cutting its workforce globally by 14% (the equivalent of 4,500 employees). These cuts will vary depending on the country, and Spain, where the Turkish company landed in 2021, will not be spared from layoffs either.
expansion and will significantly reduce spending on marketing and promotions.
The fall from grace of Gorillas and Getir was, in the eyes of many, a failure foretold. After all, these companies' gamble was always incredibly risky: investing heavily to expand at lightning speed and spending lavishly to attract and retain customers.
A Bain & Company report warned last year that "with the current express delivery model, to achieve positive profitability it would be necessary to multiply the volume by four" and also double the average size of the shopping basket. However, none of these circumstances have ended up happening and "quick commerce" companies, which until a few months ago were spending money hand over fist, are now tightening their belts and fighting for their survival.
Perhaps the premise on which they underpinned their aggressive expansion strategy (that there really was a lot of demand for ultra-fast deliveries) was rather wrong an