Turkish express delivery startup Getir has acquired German rival Gorillas. This further reduces the number of companies in Europe promising to get their grocery products to your door in minutes.
This merger left only three such businesses active on the continent: Getir, Berlin-based Flink, and US-based Gopuff.
According to a tweet from the founder of Getir, the Gorillas value of the acquisition fell from $3.1 billion in September 2021 to $1.2 billion. Gorillas has been among the most overrated startups in the instant grocery delivery industry, offering delivery times of less than ten minutes and numerous discounts.
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Founded in 2020, the company has expanded rapidly to include multiple European cities, reaching revenues of $2.6 billion in 2021.
This growth reflected a new business model for grocery delivery as quarantine restrictions push consumers to order products online.
To meet the growing demand at the time, startups like Gorillas and Getir established warehouse networks in cities, increased employee numbers, and invested in promotional codes and discounts to stay competitive.
Now, the fast-paced trading landscape has changed drastically as the COVID restrictions have been lifted. Earlier this year, Gorillas laid off 300 employees and exited four markets: Italy, Spain, Denmark and Belgium.
Similarly, Getir laid off 14% of its global workforce in May. And – according to a report by the Financial Times – its $11.8 billion valuation in March has now fallen to $10 billion, including Gorillas’ value of $1.2 billion.
“As funding for the Q-Commerce industry stagnates, food prices continue to rise, and consumers grapple with the cost of living crisis, it’s not surprising to see: [such] Businesses are taking action to survive in a potentially difficult 2023 for the industry, Geoff Lloyd, Retail Director of NTT DATA, told TNW.
In fact, the company’s latest survey of 2,000 UK grocery customers found that 90% of consumers cite cost as a key decision point when and where to buy their food.
According to Lloyd, the study shows that consumers prioritize cost over convenience. This means fewer people are willing to pay the extra cost, such as higher pricing or delivery fees that come with the fast trade model.
And despite the Gorillas acquisition, Lloyd believes “The future is not so bright for Bring” as the fast-trading pattern shows a broader bearish trend.
“With this in mind, there is a huge opportunity for legacy retailers and grocers to reclaim market share from Q-commerce challengers and increase sales in the coming months, as the current economic climate changes consumer buying behavior,” he added.
As consumers’ hunger for such services has been quenched by a return to normal life and the impending economic crisis, it is now clear that the fast-paced industry was started on shaky foundations.
As the industry is now consolidating, it feels like the fast-delivery gold rush is finally running out of steam.