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Last Friday, the delivery company OrdersYa opened the first supermarket in Santiago to supply users of the app. The dark store is a space of 400 square meters – more similar to a warehouse with racks than to a warehouse – where there are different products, and which can only be entered by the company’s distributors. The company’s bid is to compete with convenience stores for last-mile deliveries. These are: few products, but they arrive quickly.
The COO of the firm, Esteban Gutiérrez, tells from Buenos Aires that the aspiration of the firm is to have one order per inhabitant per country per month. “That should be the size of our business in the next 5 years,” he says. But to achieve this, there is a barrier to entry that is great: speed and price. “Nobody asks for delivery seven days a week because they say it is very expensive. And it’s true. Competing at the price of cooking is impossible, “he says. And he adds: “Therefore, since we are never going to completely beat the cost of cooking, we want to meet the need if you are going to cook at home, buy from me. And that is tied to speed. “
OrdersIt is already part of Delivery Heroe, the largest food delivery company outside of China, with a strong presence in Korea, Turkey and the Emirates mainly. “As we are in more developed markets, we see trends that sooner or later will reach Latin America: each time the real state It is more expensive, people increasingly live in smaller apartments, which leads you to cook less and have less place to store food, “he says.
–Why bet on opening a supermarket now, when most industries are putting off their investments?
-You will imagine that a supermarket of the caliber we build does not build fast.
Delivery Heroe’s first dark store was launched in Istanbul a year ago, and today between Turkey, Kuwait and the UAE, the company has nearly 2,000 of these stores. In Latin America we started at the end of last year assembling teams, looking for locations, negotiating leases. The coronavirus actually delayed our plan. Today we would have to have 3 or 4 supermarkets open in Chile, the same in Buenos Aires and Montevideo. And we are with this one, a test one in Argentina and launching one tomorrow in Uruguay.
Gutiérrez says that the ordering commitment is based on the fact that over time people are going to make fewer “gigantic monthly purchases” from the supermarket and are going to migrate to ask every day for what I have to cook that day.
-Do you want to compete with Cornershop?
-I understand that, in general, Cornershop makes large orders and purchases of 50 units. We aim for 8 units, which can be loaded in the case that goes on the bike. The Cornershop service is spectacular but it delivers you in four hours or the next day. Me in 20 minutes, but much less. In purchase volume we will never be able to beat them, but we can in the last mile distribution. But, of course, there is a gray line where we compete.
Closed restaurants
Orders It was already born in Montevideo more than 10 years ago when its founders Ariel Burschtin, Robert Sosenke, Alvaro Garcia, all engineers, had to do a job at the university to develop the commercial area. It happened that every time they wanted to ask for a “goat” -sandwich typical of the country- the orders arrived badly because the system of taking note of the orders did not work well. Then it occurred to them to do a food marketplace. Since they thought the idea was so good, they did not present it in the course so that they would not steal them. They did poorly in the field. And they left it on standby.
Years later, they decided to refloat it. They left their jobs and left knocking on doors to restaurants one by one, offering the service. “Originally what they did is that people made their orders through a web page and behind it a person read it over the phone to the restaurant to prepare it,” says the COO.
The venture escalated, it was financed with seed capital from Mercado Libre, then Latin American and American funds entered and in 2014 Delivery Heroe bought the company. After the parent company went public in 2017, the firm accelerated its growth, especially in Latin America, with the aim of becoming the managers of the delivery, which until then fell to the restaurants themselves.
Today 70% of the business is in the restaurant food office and 30% in the purchase of beverages, the supermarket and messaging, mainly.
-How does the coronavirus change the business scenario?
-Luckily we have a shareholder with a fairly long-term vision, and it has not happened as in a lot of other industries to make cuts. We are working in home office throughout Latin America. As Delivery Hero is mainly in the east -where the virus started- it is like being with the newspaper on Monday. So we have only been translating into Spanish the protocols of the countries where the problem has been best attacked, such as Korea.
-But it is a fact that the restaurants are closed and most of your business is there.
–Before the coronavirus we were open 24 hours in some places. That is a big impact. Today we deliver until 8:30 pm. In the general number we are not better, but neither worse. The traffic of the app has not fallen, but that is contrasted with fewer restaurants open and far fewer hours open.
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