In the streets of Paris, impossible to miss them. At Getir, a fast home shopping delivery company, purple and yellow dress the scooters, like the delivery men. Other large cities, from Lille to Lyon, via Montpellier, have seen the Turkish company’s “dark stores” flourish over the past two years, these warehouses where classic supermarket products are stored, ready to be sent to delivery. We now speak more commonly of “quick commerce”, a new sector in the galaxy of uberization. In line with Getir, a slew of actors have landed in France in favor of the pandemic.
But the enchanted parenthesis seems well and truly closed. The French subsidiary of the Turkish company filed on April 20 a request for placement in receivership with the Paris Commercial Court, citing “the evolution of the regulations”. A hearing is due by the end of April. In the meantime, the ballets of scooters continue in front of its 52 “dark stores”. “It’s easy to highlight the regulation. It only comes to regulate immoral and counter-intuitive behavior. They had everything to know the failure”, criticizes Jérôme Guéret, managing director of the fund management company Go Capital, which financially supported the collaborative home delivery platform Shopopop.
A rapid concentration of the sector
The difficulties of the tricolor entity of Getir illustrate the multiple disappointments of a sector out of breath, barely three years after its establishment on the French market. In 2022, there were still around ten players. The sector then became considerably more concentrated. Business stoppages for some, mergers for others… “Quick commerce” companies can only be counted on the fingers of one hand in France. The German Flink grabbed the French start-up Cajoo last May, while the Getir group bought the prepared meal specialist Frichti, as well as the German delivery company Gorillas and its 14,000 employees. For his part, the American Gopuff has ceased his activity, as has the beverage deliveryman Kol, who has gone out of business.
In addition to the difficulties in attracting customers, the sector also had to face the revolt of the mayors. Emmanuel Grégoire knows the subject well. Anne Hidalgo’s first deputy, in charge of urban planning in Paris, has been fighting for several months to drive out “dark stores” from urban centers: “These are companies that have no economic model. They sell products to loss on a promise of service that they do not fulfill. At some point, the capital is no longer enough”. On the trunk of each Getir scooter, the famous slogan is still visible: “Your shopping in a few minutes”. In reality, that’s another story. “We were guaranteed delivery in less than 15 minutes. It actually takes more than an hour to arrive,” laughs an investor. A decree published on March 24 will also complicate the task of “quick trade”. From July 1, “dark stores” – just like “dark kitchens” – will be considered as warehouses and will no longer be able to set up as they see fit.
The end of the cash tap
The period is also less conducive to the development of the sector. “We are coming out of Covid: there is a much stronger comeback in supermarkets, especially in local networks like Carrefour Market or Franprix. Finally, the market fell apart even before the regulations”, underlines Vincent Chabault, lecturer at the University of Paris Cité and author of Store praise (Folio). The cash tap for investors also seems to have dried up. “When easy money stopped, we knew it was going to get complicated. Economic equilibrium assumes an average basket of 40 euros, when in reality it is barely more than 20 euros. It’s not three packets of crisps and a coke that can pay the charges”, we judge in the office of the Minister Delegate for Trade, Olivia Grégoire.
Gorillas has raised over $1.4 billion since its launch in 2020. Getir is valued at over $12 billion. “These are models that need to reach a very high concentration of customers in order to be able to deliver to two customers with the same delivery person. Only then do they have a chance of becoming profitable. In the meantime, it costs a lot of money. This economic equation was possible during the Covid period: the whole tech industry believed that we were going to live on the Internet and no longer return to the streets. Demand was stronger and money much more abundant”, analyzes Pierre Entremont, co-founder of the Frst investment fund, which had invested 6 million euros in Cajoo.
Guillaume Luscan, Flink’s CEO France, however, assures that “all of the company’s activity, including France and the Netherlands, will be profitable by the fourth quarter of 2024”. Financially constrained and now supervised, “quick trade” is on the menu of an information mission by the Economic Commission of the National Assembly, the conclusions of which must be made public on May 3 with 24 proposals for the sector. “We want this to succeed either in the form of a bill, or by integrating certain measures into current bills”, explains MoDem MP Maud Gatel, co-rapporteur of the mission. No more zigzags on a scooter: the “quick trade” must now go straight.