the online grocery market from Europe

Are you even in the online grocery business if you don’t deliver in 10 or 15 minutes?

Let me get this straight: this promise is not a competitive advantage, not even for a consumer who needs to buy cigarettes or who ran out of toilet paper. Nobody is that guy.

However, whatever grocery startup gets covered in the media these days feels the need to emphasise speed. Not any speed, but super speed, the 15 minute speed.

Delivery is a hard business to build and speed is important, of course, but reliability, for example, is a much more important factor than speed.

Saying that you will deliver at a certain moment and keeping that promise over and over again in any circumstance, is more important than a general 15-minute commitment, which will make your implementation hard to start with.

If those startups were really serious about it they would say “15 minutes OR you get your money back”. That would show they mean it.

Bref, the 15 minute delivery is just a PR flick, a silly sort.

Anyways. The grocery sector is hoooot in Europe - with four o’s, as many as the number of the sizeable fundraising deals announced only this week.

I found it fitting to dig a bit into it - made a list with startups that raised in the last 12 months or so and threw them in a spreadsheet.

By no means a complete one, but comprehensive and relevant to getting an idea about what is going on in the sector.

It looks like this, sorted by the total raised:

 

So there’s four tiers, at least. The big-pocketed global guys, the locally established, the well funded wannabes and the wannabes.

1. The top 3 bunch operating big are the gorillas to poke, or rather to avoid.
2. The middle tier that raised some money and which needs to put together a quick and dirty model that can be scalable fast. They need significant share to be in competitive position against the top tier.
3. There’s also some local players which raised big amounts and preferred to get deep locally rather that expand horizontally on different geographies.
4. The below 20 category is either focusing on small local market or will upgrade one level up by raising more very soon.
 

Not listed above but worth mentioning - the traditional players who are not passive at the online opportunity. They have bigger inertia but cannot be neglected.

It’s still a lot of blue ocean in the online supermarket delivery market so competing against each other is not really a zero sum game. Yet.

How will this market configuration look like in one year? How about in 3 to 5?

The fragmentation is big and the value is created in disparate ways, where is the consolidation going to happen? What is the inflection point?

How do you play your cards and how do you define your end game? Do you go deep in one country or region, or expand quick and dirty in selected metropoles?

Will the big cities be enough? Will the small cities be worth marginally for doing business?

How important is the cultural factor? The buying groceries behaviour is different in Madrid versus in Stockholm.

So many questions, variables and strategic moves - it is an interesting strategy exercise, and a bet which a handful of select European and American VCs already made.

The screenshot from above is from a report profiling 21 startups from the on-demand grocery business from Europe and that raised money in the past year.

In the same report you will also find the downloadable excel, including the names of the startups, their profiles and their investors.

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