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15 minute revolution.  What are the ubiquitous companies that promise to deliver at lightning speed?  - observer

15 minute revolution. What are the ubiquitous companies that promise to deliver at lightning speed? – observer

But even the giants falter in this sector. They are fueling doubts about the feasibility of the work. In the last week of May, Getir announced, in an internal statement carried by the specialized website Take CrunchAnd laying off 4,500 workers, which is equivalent to 14% of the company’s total employees. At the same time, it has suspended its growth plans, and will move towards reducing costs through advertising, marketing, promotions and discounts, which in recent years have contributed to the formation of the company’s identity with consumers.

The announcement did not surprise market experts. Pedro Vasconcelos recalls that Getir “is very well organized and has already proven to be able to make money”, and is even one of the companies “better to keep going.” But looking at the market as a whole, he has doubts about the survival of some brands. “These companies have grown very quickly, because they have so much traction from consumers, and venture capital funds, which are very focused on growth at any cost, have ended up investing sums we are not used to in businesses that still haven’t had time to prove their value. ‘, summarizes.

“Now, with the adjustment of the market, the inflated firms have ended up with the market shock, it is not worth much. They cannot support such a large structure of workers and they adapt, they close the markets and fire employees. What is being said is that there will be more layoffs,” he predicts. The leader of the batch still refuses to talk about the “bubble”. “Maybe it’s a market that still doesn’t deserve the same amount of thought, but I wouldn’t call it a bubble. The same thing happened with Uber in the beginning, but it eventually found its place. It fits into the community ecosystem. With these services it will be the same. But in fact, it was There is a lot of speculation about them.”

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“Initially, the impressive growth of these companies was very promising from a return standpoint. The focus has been on a lot of growth in the last couple of years, with big investments, very serious investment rounds. But since January, technology has been penalized. Today the focus is more on profitability. in making investments in marketing profitable for business to finally enter the positive EBITDA path and reassure the investor, proving that this is not just a promise”, adds Gonçalo Rebelo de Almeida.

To ensure a profitable business, what many companies do is charge products higher than the supermarket price and add a delivery fee, which is around 2 euros. “Where companies have to generate income by ensuring the maximum number of deliveries per hour and per courier. This is why a carrier can only go up to x kilometres,” notes the CEO of Batch. Therefore, it is necessary to have several small “hidden shops” scattered throughout the cities, in order to be able to cover the whole city in the least possible time. Experts say it’s not easy. Therefore, not everyone can tolerate it for a long time. It is therefore not surprising that acquisitions by larger companies are frequently announced. Pedro Vasconcelos defends “Without a doubt, it is a business that only works on a large scale.”

Getir recently bought two competitors, the British Weezy and the Spanish Block. “There are some very large operators, which are well-funded, who can dominate the investment in marketing, and smaller operators who are finding it difficult to get a similar notoriety, so the trend will be towards market consolidation,” says Mercadão CEO. “Business is a requirement, like anything else in food retail. Margins are low, it’s not like fashion or jewelry. To have a scale, you can’t have a thousand competitors. It makes sense to grow organically on one hand, but also through operations Acquisition. With scale, the business becomes sustainable. He adds that it is difficult for the company to survive “in this sector.”

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Milana Dovzhenko, CEO of Portuguese company Bairro, knows this fact well. He admits that he has already had “conversations” with almost all large companies operating in Europe in this regard, but the time for the acquisition has not yet come. He doesn’t even know if he will. “We think our talent and potential is strong and special. Consolidations happen, they are healthy and inevitable, but the important thing is to understand who is going to be the market leader. It is very complex to lead a food retailer from another country,” he concludes, without explaining his point of view. company in the near future.

Like other specialists, Milana rejects the existence of a “war” on the national market. “Portugal is a market that must be created. The war is being waged in leading markets such as Germany, France and the USA. It is the so-called Level 1 MarketWe are a virgin market. In short: We are in the stage of consumer education. It is supported by Gonçalo Rebelo de Almeida. “Our scenario is less severe than in other geographies, because it is a smaller market, and it does not have a significant impact on the accounts of large companies and on targets such as markets like Germany or Spain.” But potential candidates are plentiful.

One of the giants of the world making his way across the field is Gopuff. Born and raised in the US in 2015, it’s already in the UK, it was launched in France in March and it’s pre-launch in Madrid. There are no plans to reach Portugal in the short term, the company reveals to the Observer. “But we have the ambition to become a truly global company,” says the same official source. For now, Gopf says he is “focusing on deepening his presence in the UK and France”.

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What is considered a pioneer in the high-speed delivery market was born when the two founders, both college students, wanted to make it possible to purchase late-night snacks, such as sweets or chips, without having to go to rest. a store. Today, Gopuff is one of the decacorn for express delivery. Its value is estimated at $15 billion. Last year alone, the company raised more than $2 billion. In order to “burn” money, you need to raise money.