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GoPuff pulls out of Spain as q-commerce belt tightening continues – londonbusinessblog.com

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The tightening of the q-commerce belt continues: US-category veteran GoPuff, the Softbank-backed delivery platform — still valued at $15 billion in 2020, and was rumored to be preparing for an IPO early this year (er, no, that didn’t happen!) — reverses his ambitions in Europe.

According to a report in Bloombergciting people familiar with the matter, the high-speed grocery delivery boy plans to pull out of Spain in a bid to downsize its operations and aim for profitability — a move that will also see it will put its regional focus on the UK market, per the report.

The news publisher says the UK is one of GoPuff’s fastest growing markets, with sales increasing by 30% per month.

A GoPuff spokesperson declined to comment on Bloomberg’s report, but we understand the content of the story is correct.

GoPuff was not launched in Europe until November 2021. At the time, it spoke optimistically about major regional expansion – say it would go to “every country in Europe” – so it’s quite the reversal of fortunes, though not unique to GoPuff. The entire q-commerce category has been hit hard after the pandemic, as personal activities have returned to urban life – and especially as the economic downturn has taken a bite out of on-demand demand, encouraging shoppers to choose price over convenience. couples (or indeed impulse treats like late night ice cream).

In July, GoPuff announced it cut 10% of its global workforce (around 1,500 employees) and closed dozens of warehouses as it had to curb spending after it expanded too quickly during the pandemic.

Earlier in the spring, it also confirmed that a potential IPO filing was on ice due to the market downturn.

In addition to the UK and Spain, GoPuff operates in France — where it launched in March in Paris and most of Île-de-France, plus parts of Marseille, Lille and Toulouse – launch is starting there and further expansion is in the pipeline soon. But that may no longer be the case if it is focused on prioritizing the UK market.

It also currently offers service in a number of cities in Germany, such as Munich, which has rivals such as Gorillas and Flink.

The latter has attracted investment from GoPuff US rival DoorDash, among others. While the former has also raised a lot, it has also recently fallen into his pocket, including laying off staff and reducing its regional footprint to double in meatier markets like Germany and the UK.

The latter remains hotly contested with a range of ‘instant supermarket’ players still in action, including Deliveroo (also recently withdrawn from mainland Europe), Getir and Zapp, to name a few. Although there have also been some recent market exits (such as newbie Jiffy, who quickly moved to b2b in May).

GoPuff used money and investor acquisitions to quickly capture some of Europe’s q-commerce – picking up smaller UK rivals Dija and Fancy to get the ball rolling in the region. (And, according to Bloomberg, Spanish operations, including some 180 employees and five dark shops in Madrid, have sprung from the purchase of Dija — so unfortunate that executives have had to cycle through multiple employers in a few years and encounter another soon. a new owner, otherwise they could be out of work.)

In Spain, GoPuff’s departure will likely be a boon for local rival Glovo, which has increasingly turned to q-commerce through a growing darkstore game in recent years. While the tough economic conditions have also hit the local on-demand brand – and around the turn of the year, it quietly agreed to be acquired by German rival Delivery Hero, reducing any prospects of making its own IPO.

In an extra twist, last month, Glovo and Delivery Hero offices were targeted by antitrust inspections by the European Commission – which said it was investigating preliminary concerns about possible breaches of EU competition laws against cartels and other restrictive business practices. No formal objections have been lodged – and the investigation may yet come to nothing. But what will be left of Europe’s volatile q-commerce landscape in a few years – or even months – is a mystery!

Also on the horizon: a pan-EU regulation of platform workers that could further increase pressure on players in the gig economy.

The impending tightening of worker rights rules within the bloc could help explain decisions by some gig platform giants to prioritize the UK market – which is no longer an EU member, so will not be subject to to incoming reforms. While homegrown on-demand platform Deliveroo has already prevailed in a number of labor rights challenges in UK courts, it may provide rivals with a template to feed the tricky operational-legal needle on that side of the English Channel.

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