Do Getir’s woes show quick commerce just can’t work?

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Rapid grocery player Getir is close to pulling the plug on its remaining European operations including the UK, according to Sky News reports

It’s a huge fall from grace for the quick commerce giant, once valued at nearly £10bn. So where did it go wrong? Is the rapid grocery model fundamentally flawed? Or are Getir’s problems closer to home?

Getir was founded in 2015 in Turkey and launched in the UK in early 2021, one of a slew of rapid grocery providers promising delivery within 15 minutes. Unlike aggregator apps, which partner with existing stores, the players established dedicated dark stores and courier fleets.

“During the pandemic it was clear customers valued the way they could satisfy their needs,” says Gregor Murray of Digital Commerce Global. “But as soon as customers weren’t locked down that evaporated.”

Well-funded Getir responded by expanding and acquiring rivals, like Weezy in late 2021 and Gorillas in December the following year. Rival Gopuff acquired Dija and Fancy. Last year, Getir also took over US online grocer FreshDirect.

“They used their substantial war chest to open fronts all across the world,” says Quaid Combstock, former head of delivery operations at Jiffy.

While raising cash, the company was also burning it: as much as $50m a month, according to Bloomberg. And the Tesco price matches, Tottenham Hotspur sponsorship and constant promotions did little to reverse the slump in demand.

“For a sustainable business, companies like Getir needed orders to be high-margin but small basket size, they needed high customer numbers but a small delivery area, and high daily order volume with low alternative routes to customer. Since the pandemic ended that market simply doesn’t exist,” summarises Murray.

Getir_Spurs_Approved_High

Getir invested heavily to establish itself, sponsoring Tottenham Hotspur and price-matching Tesco

Two players remaining

Getir’s exit from Spain, Portugal, Italy and France, and a 10% headcount reduction last year, did little to improve its balance sheet. Its UK exit would leave only one remaining major rapid grocer here: Gopuff.

“Rapid grocery delivery is one of the worst business models ever,” says former Amazon exec Brittain Ladd, so Gopuff’s endurance is “a matter of being the last man standing”.

However, US-based Gopuff, which launched in the UK in 2021, has “done a better job of building their brand, minimising their burn rate and acquiring customers” Ladd says, while Getir “should have never tried to enter so many countries”.

“If Gopuff continues to improve their operations and keep their cash burn rate under control, it has a good chance of succeeding,” Ladd adds.

Gopuff has also been branching out – last week launching Powered by Gopuff which allows brands to leverage its dark store and courier network to deliver items ordered on their own websites.

Combstock says: “While Gopuff may be the victor in this war, I’m not convinced they will survive solely on the grocery q-commerce proposition.”

Arguably, if quick commerce has long been a “two-horse race” it has not been between Getir and Gopuff but between the rapid operators and the aggregators, says Murray.

It is Just Eat, UberEats and Deliveroo that have emerged the “biggest winner of this space” says Combstock, as well as supermarkets’ own swift services. The rapid grocers did the hard yards in boosting consumer awareness; the aggregators now service the need with a more profitable model.

“The biggest question now is why did so many VCs bet so much money on such a flawed and nonexistent business model?” says Murray.