Loss-making fast delivery service Gorillas has been making negative headlines for weeks. Half of the 600 employees at the Berlin headquarters have to go, growth plans for the USA and Great Britain are on hold, locations in several European countries are up for grabs. Gorillas is obviously fighting for investor confidence — and for survival.
Co-founder Ugur Samut didn’t notice much of that this week. For the first time he took part in the annual meeting of the consumer goods forum CGF in Dublin, the top-class congress of global retailers and brand manufacturers. The goal that Samut announced to the assembled managers – including CEOs from Unilever boss Alain Juppé to Coca-Cola boss James Quincey – was breathtakingly optimistic.
In just twelve months, the troubled food supplier is supposed to be making operating profits for the remaining business. In just three months, the start-up will be able to operate its delivery locations profitably, said Samut, who had stepped in for Gorillas boss Kagan Sümer at short notice.
“Over the past two years, we’ve hired new people as quickly as we could — and grown just as quickly,” said Samut. In fact, Gorillas has come a long way in just two years. Thanks to a good 1.2 billion euros in venture capital from start-up investors, the delivery service now has more than 4,000 employees and is active in nine countries.
The downside: According to the Bloomberg agency, gorillas write losses of almost 80 million euros – every month. Now the financiers, on which Gorillas depends for a next round of financing, demanded profits instead of growth. “We have to adapt quickly,” admitted Samut.
The crisis on the tech capital market is affecting all fast food suppliers: The Turkish gorilla competitor Getir has also cut 4,500 jobs worldwide, and the Berlin start-up Flink is also slowing down growth. The future of the business model is uncertain.
A way to profit for gorillas could be new partnerships, which could also follow from the appearance at the CGF. In the future, the provider hopes to generate additional revenue through increased advertising in the app. “Gorillas can offer brands whole bundles – from advertising banners to customer data,” said Gorillas manager Alexander Brunst WELT.
The presentation of a brand in the app is not comparable to the limited possibilities of a classic supermarket. Brunst promises access to young, experimental customers.
Brand shops with additional information in the app are also conceivable, which Gorillas wants to build up with Alnatura first. The organic brand fits perfectly with the gorilla target group, enthused Brunst. His hope: “The business as an advertising partner can make a significant contribution to profits in the future.”
Amazon is a role model. The eCommerce pioneer earns its money in the commercial business mainly through fees that providers pay for good positioning in the search hits. Johannes Berentzen from the BBE trade consultancy also sees additional revenue streams in such forms of marketing for the delivery services: New forms of advertising up to and including exclusive products for delivery services are conceivable.
In addition, brand manufacturers are used to the fact that classic supermarkets make a financial contribution for listing in the range. “The digital shelf is limited in quick commerce. Brands could pay to be included like in the supermarket,” predicted Berentzen.
Tests for such cooperation are underway. L’Oréal not only works with gorillas in Germany, but also with its competitors Flink and Picnic, said CEO Alexis Perakis-Valat WELT. Further collaborations, such as with the Flaschenpost delivery service taken over by Oetker, are conceivable. The Parisian cosmetics group is testing which products are in demand with customers via the channel. Body care and men’s products, for example, are promising.
Unilever is also currently advertising its Langnese ice cream with a banner at Gorillas. The group is less interested in other possible offers: the data that the fast delivery services want to offer the brands for sale is not particularly interesting, said Unilever data expert Stefan Bolsius. After all, there are very similar findings from classic retail and market research – with significantly larger numbers of customers.
It remains to be seen how important the fast delivery services, which are relatively young in Europe, will become for manufacturers. Because the stalled growth makes them less attractive as partners: for the foreseeable future, Gorillas in Great Britain will be largely limited to London, in the USA the Berliners will only play in New York. This is not the rapid global spread that the Gorillas founders originally wanted to impress the brand manufacturers with.
But there is also: A few days before Samut’s appearance in Dublin, Bloomberg reported that Gorillas had initiated initial merger talks with US competitors such as GoPuff and Jokr due to difficulties in getting fresh money from its investors – with an uncertain outcome.
“The manufacturers ask themselves before cooperation, which delivery services will survive at all,” warned trade expert Berentzen. “You must steer towards profits now. This is an unfamiliar game for them: Actually, they never had the goal of becoming profitable in the first few years,” said the consultant.
It is still unclear whether the business model will work at all in Europe. “Our partners experience the turbulence in the market in their own business and therefore understand,” Gorillas manager Brunst hoped.
He is also targeting retailers. Gorillas has won large supermarket chains abroad as suppliers – such as Tesco in Great Britain, whose boss Ken Murphy also appeared in Dublin. In the German home market, however, Gorillas has rather small partners: the supplier is mainly supplied by the North German trading company Bünting, and there is also the young partnership with Alnatura.
The competition from Flink, which is also equipped with around one billion euros in venture capital, is in a stronger position. At an event on the sidelines of the conference in the Guinness brewery, founder Oliver Merkel met his delivery partner and major investor, Rewe boss Lionel Souque. Both of them did not appear on the congress stage during the day, but in the evening they demonstrated their good spirits in the delivery apps’ struggle for survival.
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