Reportedly, the grocery delivery sector is facing higher costs and lower demand. Though the sector picked up growth during the pandemic, only a few such startups are active in Europe and many struggled with low margins, high acquisition costs, and competitors.
Having taken a worse turn, Turkish fast grocery delivery service Getir is all set to exit Europe starting with Germany on May 15. The company also plans to withdraw from the UK and the Netherlands.
Why this move?
In a statement, the company announced that it was withdrawing from the US and European markets and would refocus its financial resources on Turkey.
In 2022, rival delivery company Getir was in discussions to buy Flink but it bought German firm Gorillas for $1.2 billion later in the year. Getir aimed to dominate the rapid grocery delivery sector, which saw a surge in demand during the pandemic. After acquiring Gorillas, it focused its operations in five countries: Turkey, the United Kingdom, Germany, the Netherlands, and the United States. In 2023, the company acquired FreshDirect with ambitions to grow in the United States.
Notably, the company announced that it generates only a meagre 7% of its revenues from the UK, Germany, the Netherlands, and the US.
Dropped valuation
Founded in 2015 by Nazım Salur, the Turkish company delivers groceries and corner shop items to customers within 10 minutes of placing the orders. In 2023, Getir snapped a $500 million funding round, at a valuation of $2.5 billion. This is a significant drop from its previous valuation of $11.8 billion back in 2022 when it raised $800 million. Following the raise, after a few months, Getira also acquired its Berlin-based rival Gorillas.
The platform delivers a selection of 1,500 everyday items to its customers in minutes, seven days a week, day and night. Unlike other companies, Getir offers its employees a range of benefits, including full-time positions and employee status to drivers and packers. They charge a little extra money for their swift deliveries, and this became a point of concern adding more burden to the already skyrocketing cost of living. Eventually, the demand for rapid grocery delivery came down with time.
As a result, Getir has been struggling with cashflow issues for months and sent employees door-to-door with goodie bags to try and boost sales. As its approach ended up in vain, the company shut down its services in five countries and also announced 2,500 job cuts across these regions.
