getir delivery services

The Turkish grocery delivery firm Getir has acquired its German competitor Gorillas for $1.2 billion in a deal that values the combined entity at around $10 billion according to sources who spoke to The Financial Times.

The deal is part of an ongoing consolidation trend that is sweeping the space after the tailwind provided by the COVID-19 pandemic to delivery firms has progressively faded.

Smaller companies within the sector have mostly gone out of business as they have failed to turn a profit. In the case of Getir, its value proposition goes one step further than traditional delivery firms as they offer to get groceries to their customers within minutes.

Getir’s services are available in 48 different cities across Europe and the United States as well as in all of the major cities of their hometown – Turkey.

Some of the funds needed for the purchase of Gorillas may come from the $768 million Getir raised from investors including the Abu Dhabi Growth Fund and Sequoia Capital in March this year. Back then, the business was valued at $12 billion.

Both Getir and Gorillas expect to find synergies and save money as their network of warehouses overlaps in several locations. In 2021, Gorillas was forced to lay off 300 people as it struggled to raise capital from investors at a point when the pandemic tailwind was already evaporating.

An Overview of the Quick Commerce Industry in Europe

For the so-called 10-minute delivery firms, administrative and warehousing costs are among the largest as they have to set up the appropriate infrastructure within the cities they serve to guarantee the fast delivery times they offer.

A deterioration in macroeconomic conditions in the form of the highest interest rates in multiple latitudes has been making things harder for startups in the quick commerce space as they may fall victim to sharp downrounds and could fail to secure the funding required to keep their companies afloat.

The quick commerce industry in Europe is expected to generate nearly $8 billion in revenue in 2022 according to estimates from Statista. Meanwhile, until 2027, the sector is expected to grow at an annual rate of 13.4% meaning that revenues could land somewhere near the $15 billion mark by the end of that year.

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The penetration rate within the continent’s population is expected to plateau at 5.4% this year but jump to as much as 9.1% in the subsequent five years with a total of 77.1 million users being expected to use the services of companies like Getir and Gorillas.

The competitive landscape remains challenging for smaller firms and this explains why there is an ongoing trend of consolidation among mid-sized businesses as their best alternative could be to join forces to fight larger and more well-established rivals such as Uber Eats and Deliveroo.

In addition, some online supermarkets such as the UK-based Ocado have opted to launch their own quick commerce solutions to deliver their products to customers within minutes.

The EU Moves to Regulate Dark Stores

There have also been some regulatory pushes to ban or increase oversight of the so-called “dark stores”. These facilities resemble the infrastructure of a supermarket but they are not open to the public. Instead, goods are sold online and delivered by using services such as Getir.

Legislators have been struggling to come up with an adequate for dark stores as they do not want to include legitimate online businesses whose operations comply with local regulations.

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However, a wave of complaints from residents of neighborhoods where dark stores have been established have put pressure on these initiatives. Waste management, noise, and excessive traffic are some of the usual complaints of those who live near the stores.

In February this year, The Netherlands imposed a controversial year-long ban on dark stores as multiple cities were getting flooded by these establishments and locals were suffering from reckless biking and trash in their formerly pristine neighborhoods.

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