Business

Gorillas, the ultra-fast delivery operator from Germany, plans to make its US debut in New York City this month

Gorillas warehouse
Gorillas fulfills grocery orders from a network of “dark” warehouses. The German startup has announced plans to enter the US market.

  • The on-demand grocery delivery startup will launch its service in Brooklyn using bike couriers.
  • Goods such as fresh produce, milk, and cat litter will be delivered in under 10 minutes.
  • ‘We are in love with the model,’ CEO Kağan Sümer told Insider in an exclusive interview.
  • See more stories on Insider’s business page.

The red hot on-demand grocery delivery war is about to intensify with the US debut of European startup Gorillas this week.

The ultra-fast delivery operator based in Germany told Insider that it plans to kickstart its 10-minute delivery service in select Brooklyn neighborhoods starting May 30. They’ll be competing directly with Fridge No More, a startup that delivers groceries within 15 minutes to parts of the New York City borough.

Read More: NYC’s Fridge No More specializes in 15-minute grocery deliveries using scooters.

Unlike grocery-delivery operators Instacart, DoorDash, and Uber, Gorillas does not rely on gig workers to fulfill deliveries. Instead, it employs a fleet of bike couriers who deliver goods from strategically located “dark” warehouses.

The delivery fee in the US will cost $1.80 with no minimum purchase required. Consumers can order one item or a basket of goods. However, there are some weight limitations as groceries are delivered by bike. Each warehouse will hold about 2,000 to 2,500 items ranging from fresh produce and milk to cat litter.

“We are in love with the model,” CEO Kağan Sümer told Insider in an exclusive interview. “So if this model is executed the right way, it is going to be transformative in a big way.”

Gorillas
Gorillas employs bike couriers to delivery goods.

Depending on the neighborhood, Gorillas’ delivery choices will also include artisan foods from local businesses. In Brooklyn, Gorillas will carry bagels, ice cream, and chocolate truffles from Black Seed Bagel, OddFellows Ice Cream Co., and Fine and Raw, respectively.

On US launch day, the warehouses in Brooklyn will support the following neighborhoods: Bushwick, East Williamsburg, and parts of Downtown Brooklyn including Boerum Hill, Cobble Hill, and Carroll Gardens.

In the coming weeks, Gorillas said it plans to “expand quickly” to other parts of Brooklyn, as well as neighborhoods in Manhattan and Queens.

“We are also eyeing other urban markets and you can expect to see Gorillas launch in other East, Central and West Coast cities by the end of the summer,” a company spokesperson told Insider.

Fridge No More also announced plans to expand beyond Brooklyn after its $15 million Series A funding round earlier this year.

Gorillas, which launched in June 2020, has more than 80 warehouses in 25 cities in Germany, the Netherlands, UK, and France. It plans to expand to Italy later this month, as well.

In Europe, Gorillas competes with Berlin-based Flink, Turkish delivery service Getir, and 10-minute delivery service Dija. Gorillas raised $290 million in a Series B round in March led by hedge fund Coatue.

A highly contested US grocery market

Gorillas enters a crowded US space where multiple e-commerce players like Instacart and startups like Gopuff are competing for market share. These services erupted over the past year as consumer adoption of online ordering accelerated during the pandemic.

Online grocery sales grew 54% in 2020, reaching nearly $96 billion, according to eMarketer. The segment is projected to surpass $100 billion in spending this year.

Instacart is dominating the space and saw huge growth during the pandemic, according to market research firm 1010data. The firm, which analyzes consumer behavior, said Instacart saw a 323% surge in year-over-year sales in 2020.

Read More: Here are the 13 companies competing for dominance of the $100 billion grocery industry.

Still, with business restrictions easing in the US, the meteoric growth of online grocery orders appears to be slowing.

Edison Trends, which tracks online grocery transactions, said e-commerce grocery spending was up 88% in February 2021, compared to February 2020. In March, overall spending increased by just 37%.

This, however, doesn’t concern Sümer. While some consumers will return to “traditional” in-store shopping, Gorillas is betting more people will stick to online grocery shopping because they’ve grown addicted to fast delivery services.

“These people adapted, tasted this convenience, so they will want to keep on,” he said.

Read the original article on Business Insider

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