Turkish quick commerce startup Getir is leaving Germany, the Netherlands, and the UK. Getir will concentrate exclusively on its domestic market, signaling a significant turning point for the business that once dominated the European speedy grocery sector — an industry swiftly transitioning from VC fascination to ridicule within a few brief years.
With only a few competitors left in Europe, Getir’s departure from the continent presents startups still striving to succeed with this business model with an opportunity and a chance for introspection. Some observers attribute the challenging unit economics associated with delivering orders to customers within 10 minutes, while others suggest that Getir attempted rapid expansion, overly dependent on costly promotions to expand its user base.
Which speedy grocery companies are left operating in Europe, and can they succeed? Sifted analyzed the quick commerce sector, and the three major European players left: Flink, Zapp, and Gopuff.
The cost of quick commerce is compounded by the commitment to delivering orders within a 10-minute window, necessitating a broad network of small, local warehouses in urban areas where rents are steep, while the size of each order (the basket sizes) remains relatively small. Grocery companies offering slower delivery options, such as the Netherlands-based online retailers Crisp and Picnic, continue to attract venture capital funding by suggesting that less immediate orders will result in larger basket sizes and improved margins on those orders. Opting for next-day delivery also allows companies to utilize larger warehouses in more cost-effective locations and optimize driver efficiency by scheduling delivery slots with customers.
Apart from the costly endeavor of delivering orders within a 10-minute timeframe, larger and well-established food delivery firms such as Glovo, Deliveroo, Wolt, and Uber Eats have ventured into grocery delivery. This enables them to provide a comparable service to quick commerce operators but with reduced customer acquisition expenses, given their existing user base on their apps.
Source: Sifted