Yandex Fast Grocery Delivery Business Exploring Options in Europe

Yandex, the Russia-based internet company, and its fast grocery unit Yango Deli are rethinking the company’s strategic priorities in the United Kingdom and France, TechFundingNews.com reported Friday (April 1).

The news outlet reported Yango Deli delivery will end its operations in France as the business suffers. The company is also exploring the sale of its United Kingdom division, sources told the online news organization.

“Yango Deli is gradually suspending its ultra-fast grocery delivery operations in Paris,” a Yango Deli spokesperson said. “This was a pilot project with a small number of dark stores, and it has underperformed our internal targets.”

The company is the latest Russian firm to feel the heat from widespread sanctions targeting the country following the country’s invasion of Ukraine and competition.

Yango Deli is among a handful companies offering consumers grocery items in minutes.

“The ultrafast delivery market in London is highly competitive and we see a considerable amount of interest in our business there, including from peers,” the Yango Deli spokesperson added. “However, we can’t provide any further details on this at the moment.”

Yango Deli estimates that customer retention in London is 40%, about 1.5 times higher than the market average. The average active user makes 4.2 orders per month, which is around twice the market mean.

The spokesperson noted there is already interest from buyers for the subsidiary’s London unit.

The decision comes as increased competition has led to consolidation in the sector.

Last month, PYMNTS reported the number of players in the ultrafast grocery delivery space is making moves in the space unsustainable globally. There has already been a significant amount of consolidation in this young category.

Read more: Ultrafast Grocery Acquisitions Continue Amid Category’s Demand for Consolidation

Media reports recently revealed that German quick-commerce startup Gorillas has closed its first acquisition deal for the French delivery startup  Frichti for undisclosed terms.

“We only want to do something where we can also draw out know-how for ourselves, not just a few warehouses with additional cash burn,” Gorillas Chief Financial Officer Elmar Broscheit said of the company’s M&A strategy in an interview with Germany’s Boersen-Zeitung, Bloomberg reported.