(qlmbusinessnews.com Tue, 22nd Aug, 2023) London, UK —
The swift grocery delivery provider Getir is set to reduce its workforce by approximately 2,500 positions across five nations, including the UK. This decision underscores the dwindling demand within the delivery market.
The company stated that the job reductions, constituting over 10% of its workforce of 23,000, will impact couriers, pickers, and office staff in the UK, the US, Germany, the Netherlands, and its home base, Turkey.
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As part of its strategy, Getir has already withdrawn from Spain, Italy, and Portugal, attributing the decline in demand for ultra-fast grocery deliveries, completed within 20 minutes, to the ongoing cost of living crisis and escalating expenses.
Challenges are emerging for rapid delivery specialists such as Getir and Gopuff, as larger competitors like Deliveroo, Uber Eats, and JustEat expand their services to include grocery deliveries alongside takeaways. Notably, in the UK, major retailers like Tesco, Sainsbury's, and Ocado offer their own rapid delivery options – Whoosh, Chop Chop, and Zoom.
The market landscape has considerably shifted since the reopening of hospitality establishments, offices, and high streets following pandemic-related lockdowns. This shift has prompted consolidation among numerous private equity-driven operators that initially capitalized on the surge in demand for home deliveries.
Investors globally poured over $14 billion (£10.5 billion) into the market during 2020 and 2021, as reported by analysts at PitchBook. However, interest in this sector has rapidly waned.
In 2021, venture capital investment in on-demand delivery globally plummeted by more than 60% to £3.8 billion, according to PitchBook. This downward trend is anticipated to continue this year.
Getir, founded in Turkey in 2015, acquired competitor Gorillas in a $1.2 billion deal in December 2022, following its acquisition of the UK's Weezy the previous year. In a similar vein, Gopuff, a smaller competitor, purchased the UK's Fancy and Dija in 2021, while rival Jiffy discontinued its deliveries last year.
Amidst stringent cost-cutting measures, both Zapp and Gopuff have entered into partnerships with Deliveroo in the UK to facilitate deliveries in specific regions. Additionally, Getir has collaborated with JustEat.
Navina Rajan, Senior European Private Capital Analyst at PitchBook, highlighted the significant shifts witnessed in the on-demand delivery market over the past two years. Factors such as tighter financing conditions and a shift from prioritizing growth at any cost to a focus on profitability have driven consolidation and intensified pressure on companies to exhibit a pathway to profitability.
Reports suggest that Getir is currently seeking to raise $500 million in a funding round led by existing investor Mubadala, the Abu Dhabi sovereign wealth fund, to sustain its operations.
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Getir expressed its regret at having to reduce its team size but emphasized that this step is being taken to enhance operational efficiency. The company assured that it is committed to supporting affected employees in accordance with its values and local laws. Getir acknowledged its employees' contributions and dedication to the business.
The company reaffirmed its commitment to the industry it pioneered eight years ago, expressing its intent to lead the industry's development in the future.
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