There’s more startup trading in the food delivery industry: Spain’s Glovo is expanding its reach into the planned grocery buying space. The on-demand platform operates dark-store networks and focuses on urban convenience shopping. It announced the acquisitions of Lola Market, Madrid, and Mercadao, Portugal.
The terms of these acquisitions have not been disclosed.
According to Crunchbase, 2015’s Lola Market raised approximately EUR3M. The amount that Portugal’s Mercadao, which was established in 2018, has raised during its short run is not known.
On-demand Spanish delivery platforms are facing difficulties in Spain where the government applied labor reforms aimed at gig economy delivery workers.
Glovo responded to this by making it mandatory for riders to be self-employed. It employs only about a fifth of its passengers. The scene is set for legal problems in the country.
Legislators at the European Union are also looking for ways to make platform workers more productive. This could include pan-EU legislation with wider implications for regional business models like Glovo.
The ongoing regulatory issues surrounding employment classification and algorithmic managing workers in gig economies might provide some context to Glovo’s growing interest in grocery shopping in Europe. Glovo has built a network dark shops in order to support what it calls Q-commerce (aka fast urban convenience shopping).
It also announced its recent international expansion in Africa. There, it said that it would be doubling down on investment for the next twelve months.
Consolidation is also a challenge because it requires achieving profitability in order to deliver food on demand.
Glovo’s expansion of its reach to shoppers by adding new players to the grocery and retail outlets picking up delivery space allows it to nudge them to spend more. It can also cross-sell customers on planned purchases, such as the weekly grocery shopping. Glovo can also sell what it calls “emergency necessities” and “fast and convenient” because it has a smaller inventory in its dark city centers.
Glovo says that both Lola Market’s and Mercadao brands will remain intact. They will also operate separately, according to Glovo. Mercadao CEO Goncalo Saares da Costa will lead them.
The acquisitions will strengthen its position in Europe’s “key markets”. It then suggests that it will expand its market reach by adding grocery picking and delivery, including in Poland and Italy.
It also stated that its Q-Commerce Division is on track to achieve a gross transaction value (GTV), of over EUR300M annually this year. The company added that they expect that figure to triple by 2022 and that the run rate will exceed EUR1BN.
Oscar Pierre, co-founder and CEO of Glovo said in a statement that the company’s latest acquisitions had given him hope. “We see tremendous potential in on-demand grocery marketplace. Both companies are strong local competitors in their respective markets. This will further strengthen our Q-Commerce offering.
We can strengthen our partnerships with retailers and offer big-basket purchase options to our customers and provide a complete service. “With Lola Market, Mercadao and Mercadao joining us, we are able to build stronger relationships with them and make it easier for them. We are pleased to announce that we have acquired Lola Market and Mercadao. This allows us to now cover the major purchasing concerns for grocery customers. Glovo is now an all-in-one shop for electronic groceries.
Publiated at Tue 14 Sep 2021, 10:09:04 +0000