Quick Commerce Apps Like Getir In Need Of Fast Reinvention To Survive

Leading quick commerce startup Getir is considering closing all of its dark stores in France besides those located in Paris and letting go of more than 500 employees. After acquiring rival Gorilla in December 2022 for more than $1 billion, Getir’s announcement comes as a surprise and disappointment for both employees and the French government, who received a request for insolvency proceedings earlier this month.

Quick commerce’s decline is starting to look almost as sharp as its success. When Getir launched mid-2021 in France, the company benefited from a difficult social context impacted by various lockdowns, making rapid home delivery attractive to those cooking and eating at home on a daily basis. The Turkish startup had also launched in the U.K. a few months earlier, looking to introduce and become the pioneer of quick commerce in London. In 2022, the company closed a $768 million Series E funding round and was valued at more than $11.8 billion. Despite praising its technology, speed and real-time product inventory that eliminates the risk of out-of-stocks, Getir sees no road to profitability and is facing an uncertain future.

Consumer attitude in Western Europe doesn’t favor quick commerce

In addition to the sector facing extremely unattractive margins and no clear path towards profitability, startups like Getir rely on behavorial change for product adoption and it likely will not happen any time soon, or at least not through the current value proposition focused solely on grocery delivery.

Today, consumer attitude towards grocery shopping in Western Europe simply does not favor quick commerce. When Getir launched in Amsterdam, London, Berlin and Paris in 2021 in the midst of the pandemic, it enjoyed demand from urban customers due to strict government restrictions. Less than two years later, the startup’s attractiveness has fallen as there is not enough demand for ultra-fast grocery delivery services.

In addition, most if not all leading grocery retailers are investing heavily on their e-commerce capabilities to capture and respond to the rise of online grocery shopping across Europe. Carrefour announced in its latest investor presentation its commitment to reach €10 billion in e-commerce gross merchandising value by 2026 and a €200 million increase in e-commerce operating income. U.K grocery leader Tesco is enjoying online sales growth of +60% versus pre-pandemic levels and 1.1 million online orders per week. With improved order fulfilment and delivery slots, grocery retailers can now satisfy demand for next-day delivery. As a result, why would shoppers not order groceries from the retailers they are familiar with? Although apps like Getir target a specific type of audience and basket size (think smaller basket and urban customers fulfilling an immediate consumption occasion), they also have to compete with convenience stores.

Last-mile partnerships and consolidation as the way forward

Quick commerce startups focusing solely on grocery delivery currently run an unattractive business model. However, providing fast-delivery services is something every business seeks to optimize, especially grocery retailers which are constantly looking to improve their last-mile fulfilment model. Online grocery sales represented nearly $85 billion in 2022 and are expected to grow +11% in the next five years, stressing the importance of convenient and speedy delivery services. Retailers recognize the need for efficient delivery services but face many hurdles quick-commerce startups do not have, which is why partnering with these delivery startups could help.

Global grocery retailer Carrefour partnered with Spanish fast delivery startup Glovo for its last-mile delivery service back in 2019 across various markets, and areas served are increasing. In Poland, portfolio assortment is also expanding: “To meet the needs of our customers, we plan to soon introduce non-food products to our offer, such as electronics, home and garden or products for children,” said Marek Garus, e-commerce operations and development director at Carrefour Polska in a recent article. In many of its French and Spanish supermarkets, Carrefour offers free delivery services for purchases above €40 and a 30-minute delivery thanks to Glovo, allowing the retailer to cater to all types of basket sizes and occasions thanks to this partnership.

Consolidation and partnerships with delivery players are also a route favored by quick commerce startups to boost order volumes and optimize costs to reach profitability, with Getir acquiring Gorilla in Europe and in recent talks to acquire Flink (although recent news seem to indicate that Flink just closed a new round of funding and walked away from negotations). Getir also recently partnered with Just Eat, a European meal delivery service app, in order to reinforce mutual product offering and customer base. The partnership is set to cover many European markets with an initial launch in Germany, with 2000 grocery products available on Just Eat’s mobile and web platforms.

Ultra-fast delivery apps that introduced the concept of quick commerce need to reinvent their business model in order to survive. Lack of demand for 30-minute grocery delivery in Western Europe, mounting operational costs and inflation are making profitability highly unlikely, forcing startups like Getir to review their strategic vision for potential revival. As companies approach further consolidation and partnerships and aim to find a path towards profitability, 2023 will tell us if quick commerce is set for reinvention or slow disappearance in Western Europe.