Exits, Partnerships Signal Ongoing Shakeup In Competitive EU Q-Commerce Market

The global delivery food market has been going through a shakeup this year, one that has been defined by high-profile exits, partnerships and consolidation moves as industry players seek to gain an edge in the fast-growing, competitive European quick commerce market.

Two months after announcing a plan to exit the Netherlands, British online food delivery company Deliveroo announced this week that it will officially end operations in the Dutch market, which made up just 1% of its gross transaction value in the first half of the year, next month.

“Following consultation with employees and riders, Deliveroo has determined that achieving and sustaining a top-tier market position in the Netherlands would require a disproportionate level of investment with highly uncertain long-term potential returns,” the company said in a news release Wednesday (Oct. 19).

Learn more: Deliveroo to Exit Dutch Market in November

Dutch multinational Just Eat, which owns Grubhub, has also made clear its intention to part ways with some of its subsidiaries.

This week, the firm told shareholders that it was still exploring opportunities for a full or partial sale of Grubhub and is expected to complete the sale of its 33% stake in the Brazilian food ordering website iFood on Nov. 18.

Read more: Grubhub Sees Traction From Partnerships as Parent Swings to Profitability

Consolidation moves are also taking place, and German quick commerce company Gorillas may finally have found a buyer in Turkish rival Getir following months of courting buyers, per a recent PYMNTS report.

Read more: Turkish Delivery Startup Getir Moving to Snap Up Gorillas

While acquisition talks are still a long way from being finalized, now that the prospect has been floated, it’s hard not think of other alternatives.

Besides Getir, the only other player in the space with deep enough pockets to afford the German startup is likely GoPuff. But considering the US firm’s recent decision to pull out of Spain as part of plans to dial back its European expansion plans, taking on the mainland European market is clearly off the table for now.

Related: Businesses Abandon Mainland Europe to Focus on Post-Brexit Britain

Also related: Battle for London Rages on as Q-Commerce Eyes Path to Profit

On the upside, Doordash’s $8 billion acquisition of Finland’s Wolt earlier this year demonstrates that some delivery aggregators are bucking the exit trend, and certainly have the resources to close large international deals.

Read more: DoorDash Becomes Major International Competitor With Close of Wolt Acquisition

Supermarket Partnerships

What’s more, a string of partnerships forged between delivery aggregators and European supermarket and grocery brands suggest that the aggregator delivery model is just as viable for snacks and beverages as it is for restaurant orders.

And there is certainly a precedent for q-commerce—supermarket tie-ups — which offer benefits to both parties and create major supply chain synergies.

Uber Eats, for example, announced Tuesday (Oc. 18) a U.K. initiative under the name Uber Eats Market, in partnership with British supermarket chain Iceland Foods, which is aimed at making the aggregator the partner of choice for British retailers, while strengthening its position in the quick commerce space.

Related: Uber Eats Bets It Can Succeed Where Fast Grocers Failed

Gorillas has also inked deals with a number of the continent’s established grocery businesses including Jumbo in the Netherlands and Tesco in the UK.

In fact, it appears most, if not all, of the biggest European q-commerce players have relationships with major grocers. In these deals, the younger disruptors get to leverage their traditional grocery peers’ decades-old trade relationships and significant bulk-purchasing power.

Supermarkets, on the other hand, gain an easy way to add last-mile capabilities to their existing logistics operations and ensure their continued relevance as European consumers’ shopping habits evolve.

For example, as part of the Tesco-Gorrillas deal, Gorillas operates dark stores out of unused space in Tesco’s vast retail facilities.

But the larger supermarket is by no means contractually tied down, leaving it free to also pursue alternative q-commerce avenues such as its partnership with Uber Eats — Tesco Whoosh.

Across the continent, grocers have largely maintained their ability to explore other distribution options while the likes of Gorillas are expected not to list products from competing supermarkets within the same area.

In Carrefour’s linkup with Flink, for example, the French supermarket became the startup’s “exclusive retail partner” in France by virtue of a preexisting agreement with Cajoo, which Flink acquired in May.

Learn more: French Grocer Carrefour Pins Hopes on Digital Efforts to Boost Revenue

As part of the acquisition, Carrefour became a Flink shareholder, having been an early investor in Cajoo. The French Retail group stated at the time that it will also leverage Flink’s dark store network to accelerate its own rapid delivery service Carrefour Sprint. Like Tesco Whoosh, Carrefour Sprint taps Uber Eats’ gig workers for store-to-door distribution.

Learn more: Uber Drives 15-Minute Grocery Delivery in Paris

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