About the online groceries market and 15 minutes delivery

Weezy is a new London startup promising to deliver groceries within 15 minutes, for the moment in Fulham and Chelsea (some affluent hoods from London) - here’s the PR spiel.

The 15 min seems like an extreme constraint that could work for viral purposes but not sure it’s scalable. 15 minutes vs 1-2 hours is not much of a big differentiator as in retail consumers care more for i) price; ii) product scope and iii) stock availability. On top of that it’s more important to be predictable and on time rather than the fastest, given you deliver within an hour or so.

Weezy’s app (ios) seems to be still very rough to the edge of unfinished and what’s the point of selling online if you can place an order only from 10am to 10pm? Dark kitchen but for the ecommerce?

These constraints seem more suitable for impulse, on-the-spot transaction decisions rather than for planning - buying groceries is a planning process. Definitely an interesting experiment to follow.

Tbh I like better Jow’s edge in the space, also a retail aggregator of online groceries but based on customized menus they put on the front end for consumers - it’s a sort of lock-in preventing price-based decisions, making switching costs higher and without the inventory costs (they’re operating on top of physical retailers).

Online grocery retail is a dog-eat-dog business that relies heavily on suppliers, great logistics, distribution and good consumer prices. You live on thin margins and, as it’s the case of Weezy, you also have inventory costs that will require a lot of capex (storage, refrigerators, mopeds etc) and opex (stock), you work with perishable goods you need to turn over fast etc.

It is a hard business requiring consumer branding, differentiation and marketing spending even though the main asset to build has little to do with those.

Selling groceries online is a good trend to ride nowadays in Europe, as Covid augmented the e-commerce demand but the opportunity is rather taking share from local supermarkets than from Amazon. It is hard to compete with Amazon’s prices and logistics - you may win some local fights but not the war.

Weezy is basically a bet for developing a competitive logistics and delivery service, ultimately to be exited off to a lagging retail chain or even to Amazon in an edge, lucky case. Question is how many such logistics and distributions hubs can London sustain, and other big cities for that matter, on top of taxis, food and postal services - all of them will ultimately want a piece of the grocery delivery service.

Heartcore is one of the backers, unusual for them to take such early risks, probably high on conviction from prior deals with Taster (a dark kitchen op which relies on 3rd parties distribution) and La Fourche (a digital consumer buying club for organic food).

They now invested in three different parts of the chain, a correct directional bet based on the thesis that the online food delivery is going to grow quite a bit in Europe in the future. Arguably Weezy seems the most riskier of the three, and not because of the stage but because there’s no visible moat - it’s a pent-up demand business with lazy incumbents.

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