Getir, the Turkish fast delivery startup, has bought its German rival Gorillas. This further reduces the number of companies in Europe promising to bring groceries to your door within minutes.
This merger leaves only three such businesses active on the continent: Getir, Berlin-based Flink, and US-based Gopuff.
As Getir’s founder tweeted, the acquisition valued Gorillas at $1.2 billion — down from $3.1 billion in September 2021. Gorillas was among the most hyped-up startups in the instant grocery delivery sector, offering delivery times in less than ten minutes and numerous discounts.
Founded in 2020, the company expanded rapidly covering multiple European cities and reaching $2.6 billion in revenue in 2021.
This growth reflected a new business model for grocery delivery as lockdown restrictions pushed consumers to order goods online.
To address the rising demand at the time, startups like Gorillas and Getir, built networks of warehouses in cities, increased their number of employees, and invested in promo codes and discounts to remain competitive.
Now, as COVID restrictions have been lifted, the quick commerce environment has changed drastically. Earlier this year, Gorillas laid off 300 employees and exited four markets — Italy, Spain, Denmark, and Belgium.
Similarly, Getir let go 14% of its global workforce in May. And — according to a Financial Times’ report — it’s now seen its valuation drop from $11.8 billion in March to $10 billion currently, which also includes Gorillas’ $1.2 billion value.
“As funding stagnates for the Q-Commerce industry, food prices continue to inflate, and consumers struggle with the cost-of-living crisis, it is unsurprising to see [such] businesses making moves in order to survive what will likely be a difficult 2023 for the sector,” Geoff Lloyd, Director of Retail at NTT DATA, told TNW.
In fact, the company’s latest survey on 2,000 UK grocery shoppers found that 90% of consumers state that cost is a key decision point for where and when to purchase their groceries.
As per Lloyd, the study shows that consumers are prioritizing cost over convenience. This means that fewer are willing to pay the extra cost that comes with the quick commerce model — be it higher pricing or delivery fees.
And despite Gorillas’ acquisition, Lloyd believes that “the future doesn’t look too bright for Getir,” due to the wider downwards trend of the quick commerce model.
“With this in mind, there is a huge opportunity for legacy retailers and grocers to gain back market share from the Q-commerce challengers and increase sales over the coming months, as the current economic climate is altering consumer buying behavior,” he added.
It’s now clear that the quick commerce industry was launched on shaky foundations, as the consumer hunger for this sort of service has been doused by the return to normal life and an upcoming economic crunch.
With the industry now consolidating, it feels like the fast delivery gold rush is finally running out of steam.