Getir
The rapid-delivery landscape in Germany is witnessing a significant reshuffling as Getir, a pioneer in ultra-fast grocery delivery, prepares to exit the German market by mid-May. This retreat not only marks the end of Getir's operations in Europe but also signals the disappearance of Gorillas, once a key player in the sector before being acquired by Getir in late-2022.
Getir's exit is attributed to unsustainable financial pressures exacerbated by fierce competition and rising operational costs. Despite the initial success and a venture capital influx totaling $2.3 billion, the company faced a stark reality. The market for food delivery services is highly competitive, as noted by several analysts, indicating that the business model, while innovative, struggled to achieve long-term profitability.
The closure of Getir and the dissolution of Gorillas will leave a void in Germany's urban real estate landscape, and a chunk of the market to their last remaining quick-commerce competitor, Flink. These companies utilized strategically placed mini-warehouses within major cities to ensure rapid delivery times. With their departure, these spaces will require new tenants or purposes, potentially impacting local real estate markets.
Clash of the business models
In contrast to the declining fortunes of Getir and Gorillas, another delivery service, Picnic, is gaining traction in Germany. Founded in 2015 and expanding to Germany in 2018, Picnic has carved a niche by adopting a fundamentally different approach to delivery. Unlike Getir and Gorillas, which focused on speed and often operated at a loss, Picnic has emphasized sustainability and cost-effectiveness. Frederic Knaudt, co-founder of Picnic Germany, explains, "We want to reach 50 percent of households in Germany," highlighting ambitious growth plans based on a sustainable business model.
Picnic operates under what Knaudt describes as the "milkman principle," where delivery routes are fixed and optimized for efficiency, allowing drivers to manage an average of eight to ten customers per hour—a stark contrast to the quick-commerce model where drivers are dispatched for individual orders. This strategy not only reduces operational costs but also aligns with environmental sustainability by minimizing carbon emissions.
As Getir and its Gorillas exit the market, Picnic’s growth narrative is particularly compelling. The company has already achieved a significant market share in its operating regions and continues to expand. With backing from major investors, including the Bill & Melinda Gates Foundation, and a strategic partnership with grocer Edeka that ensures competitive product pricing, Picnic is poised to redefine the grocery delivery service landscape in Germany.
Critical lessons of the quick-commerce sector
Getir has - or certainly had - sizeable backers supporting its business model, including Abu Dhabi's Mubadala, Sequoia Capital and Tiger Capital, who must be hurting at the speed with which Getir has capitulated in these big European markets. Last year the company quit France, Spain, Portugal and Italy. The withdrawal of Getir now from Germany, the UK and the Netherlands underscores a critical lesson for the quick-commerce sector: rapid expansion and high customer acquisition costs do not necessarily translate into sustainable business practices. As Germany's market continues to evolve, stakeholders, particularly those in real estate and investment sectors, must consider the long-term viability and environmental impact of their business models.
For REFIRE readers, the story of Getir and Gorillas offers another cautionary tale about the volatility of tech-driven business models in real estate-dependent sectors. Meanwhile, the rise of Picnic suggests a shift towards more sustainable practices that could shape the future of urban commercial real estate and delivery services in Germany and beyond.
