From May to August 2021, the start-up Getir, an online turkish grocer, saw a $4.6 billion increase in value. Today, Getir is valued at an astonishing $7.5 billion. In only a few months, Getir has become a pioneer of the market,being the most valuable start-up in North Africa, Turkey, Pakistan, and the Middle East.
With its numbers growing, so are its users. It newly acquired 3.5 million users, and is growing day by day. Getir is now even worth more than global restoration delivery apps such as Deliveroo or Grubhub, as well as UK-titan, Marks & Spencer.
What is Getir?
The word means “Bring” in Turkish – defining the purpose of the app. Indeed, the latter offers an incredibly fast service of grocery store items, household essentials, and more recently, has upgraded to include restaurant deliveries. It was founded in 2015 and was relatively successful in its early stages.
However, it became more popular during the pandemic. Due to the ruthless lockdowns in Turkey, the start-up has grown and doubled its orders in the second half of 2020, whereby it generated $120 million from sales.
You can find it on Apple Store and Google Play, delivering over 1500 products every day, in minutes. Getir had a huge impact on the everyday life of a Turkish citizen, but also on the economy of the country and has now expanded internationally, ready to take over the world.
However, does this company created for lockdown purposes have a future in a post-covid world?
Why is it successful?
It is easy to see why investors are concentrating on the market of grocery delivery in general. The online grocery market is a fast-growing one, and apps for fast delivery have seen huge success over the last few years.
The pandemic had a big impact on Getir’s use for obvious reasons; people couldn’t go out and buy their groceries, or eat out. And, by becoming the second Turkish app to become a unicorn, Getir’s success in the last year mid-pandemic, has highly boosted Turkey’s economy and international economic reputation.
Furthermore, the characteristics of the app are unique to its success. The app charges no delivery fee on orders above £10, and most importantly, the delivery time is under 10 minutes. These defining factors have thus been the leading causes of the recent acclamations.
Moreover, Getir is the only non-Western company to have started commercialising its brand in the Western world so rapidly. Due to its efficient business model and regional success, the start-up has received wide investment from all over the globe, and has thus expanded to new markets in different parts of the world.
It makes sense for Getir to expand, as the grocery market is estimated to be gain £2 trillion a year. “The acceleration in the grocery space has been huge and went together with what has been happening in the pandemic”, Alberto Menolascina, co-founder and CEO of London based grocery start-up Dija, told CNBC in an interview.
“During Covid, everything changed,” says Glovo chief executive Oscar Pierre. “Soaring demand from locked-down consumers has demonstrated the potential of instant online delivery to both investors and other retailers”, he says. “There is now a very big appetite for groceries”.
What are Getir’s strategies to grow post-lockdown?
Investments from other banks and companies are key factors for international growth, and with investments from Silver Lake, Mubadala and Sequoia Capital this past year, Getir has been able to expand at an international level. The app’s most recent fundraising achieved £300 million that would be used to bankroll its launch in France, Germany, and the Netherlands. There are also hints of also possible launches in Brazil and Japan.
Apart from the app’s defining functional characteristics, it also uses strategies tailored to what it represents and what its goals are. Its main three global strategies are now: expanding the business to the USA, expanding into food delivery, and expanding into B2B delivery.
These strategies, however will not come without significant challenges. Indeed, any entry in an already established market calls for lots of new competition. For example, the idea of expanding into the USA seemed unlikely for Getir, as there are potent competitors such as Uber Eats, Amazon or Instacart.
However, considering the app’s track record, and success up to date, expanding to the USA could be a great move for the company.
Many investors are in fact, banking on Getir’s success in the USA. For example, Sequoia’s partner, Mike Mortiz, is an investor in both Getir and Instacart, which stands as proof of the confidence investors have that Getir will penetrate the American market.
Another approach the start-up has been implementing is GetirFood – delivering restaurant food. Although it is increasingly a dignified competition to Uber Eats, it is unclear how Getir can have the overall advantage over massive competitors like Uber or Deliveroo.
What does the market look like?
It is important to evaluate Getir’s pathway to success post-lockdown, as rivalry within grocery delivery apps’ market intensifies. Not only is Getir in a market that has been running for years and already has some big players dominating it, but it is also an emerging market, with plenty of new grocery delivery start-ups on the rise.
For example, Wolt, another grocery delivery start-up, is currently available in 120 cities across Europe, as well as Japan and Israel, with a value of $530 million. Behind is Glovo, with a value of $520 million and positioned in Spain, Italy, Portugal, and Romania.
Although they are successful within the industry, these emerging competitors still have a mountain to climb, as there remains a huge difference between their performance and that of Getir’s: a $7 billion difference.
Now that life has started to revert back to normalcy, it is complicated to predict the future of grocery-delivery apps so clearly. People now want to go out for dining and grocery shopping, an experience that they haven’t had in months.
Furthermore, from a financial point of view, Jat Sahi, lead at Fujitsu, told CNBC that the market “doesn’t seem very defensible”, because you can’t really differentiate one grocery delivery start-up from the other and these overlap with other delivery apps that are already well established; and “if you can’t differentiate, you’ll never make much margin or profit”.
However, no matter how vast the growing competition is with emerging grocery delivery apps, or with internationally-known brands like Uber, Getir still sets itself apart due to its aforementioned functional characteristics that are unique to the company and inimitable by any other start-up that follows it.
Whether or not they will be successful as life returns to normal thus depends on the success of their three strategies, and the ways in which they choose to allocate their investments.