Turkish fast delivery startup Getir has bought its German rival Gorillas. This further reduces the number of companies in Europe promising to deliver groceries to your door within minutes.
This merger leaves only three such companies operating on the continent: Getir, Berlin-based Flink and US-based Gopuff.
As founder of Getir tweetedthe acquisition valued Gorillas at $1.2 billion – down from $3.1 billion in September 2021. Gorillas was one of the most hyped startups in the instant grocery delivery industry, with delivery times under ten minutes and plenty of discounts.
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Founded in 2020, the company expanded rapidly, covering multiple European cities and reaching $2.6 billion in sales in 2021.
This growth reflected a new grocery delivery business model as lockdown restrictions push consumers to order goods online.
To meet the surging demand at the time, startups like Gorillas and Getir built networks of warehouses in cities, increased their workforce, and invested in promo codes and discounts to stay competitive.
With COVID restrictions lifted, the fast-paced trading environment has changed dramatically. Gorillas earlier this year laid off 300 employees and left four markets: Italy, Spain, Denmark and Belgium.
So is Getir let go 14% of the global workforce in May. And – according to a report from the Financial Times – the valuation is now down from $11.8 billion in March to $10 billion today, including Gorillas’ value of $1.2 billion.
“With funding for the Q-Commerce industry stagnating, food prices continuing to rise and consumers grappling with the cost of living crisis, it is not surprising to see [such] companies taking steps to survive what is likely to be a difficult 2023 for the industry,” said Geoff Lloyd, Director of Retail at NTT DATAtold TNW.
In fact, the company’s latest survey of 2,000 UK grocery shoppers found that 90% of consumers say cost is an important decision point for where and when they buy their groceries.
According to Lloyd, the research shows that consumers value cost more than convenience. This means fewer people are willing to pay the extra costs associated with the fast commerce model, be it higher prices or delivery charges.
And despite the Gorillas acquisition, Lloyd believes “the future doesn’t look too bright for Getir,” due to the broader downtrend of the fast trading model.
“With this in mind, there is a huge opportunity for existing retailers and grocers to regain market share from the Q-commerce challengers and increase sales in the coming months as the current economic climate changes consumer buying behavior,” added he to it.
It is now clear that the quick commerce industry has launched on shaky footing as consumer appetites for these types of services have been satisfied by the return to normal life and an impending economic crisis.
With the industry consolidating, it feels like the fast-paced gold rush is finally picking up steam.