Gopuff SVP Daniel Folkman is right to predict tough times for quick commerce rivals
The majority if not all of Gopuff's direct rapid delivery competitors will be extinct within the next 6 to 12 months.
So said the company’s Senior Vice President, Business, Daniel Folkman, in a recent interview.
“When money grows on trees, there’s an opportunity to do anything,” he commented.
However, when profit becomes “the pure focus […] if you don’t have a structurally sound core business, it is going to be very hard to endure especially when you have astronomical cash deployment rates,” Folkman added.
He’s right to say this, according to Brittain Ladd, a supply chain consultant and former Amazon exec.
In a LinkedIn post, Ladd said: “Some of the rapid grocery delivery companies like Getir, Gorillas, Flink, Fridge No More, Buyk, and others operating in Europe and the US, were burning as much as $60 million in cash per month.”
“The companies had nothing to show for the cash burn. Buyk was forced to shut down due to the war between Russia and Ukraine. I believe Buyk may reenter the US by 2023 but with a different business model.”
Folkman is sceptical of the longevity of brands that merely connect couriers to grocery stores, compared to Gopuff’s network of fulfilment stores and own brand products.
And he’s right to take that point of view, argues Ladd “Gopuff deserves an A+ for their entry into private label products that offer consumers high quality products at prices lower than branded CPG products.”
He added: “However, I must call attention to Deliveroo and the new Deliveroo Hop walk in store that is a combination grocery store and micro-fulfilment centre. I believe the concept has promise.”
“In addition, Gopuff has something that only one other rapid grocery delivery company has - a remarkable brand. Everything about its brand is brilliant in my opinion.”
“I believe Gorillas has also done an excellent job with their brand and colour scheme. Will Gopuff acquire Gorillas? It’s possible but I’m not convinced they should.”
In the aforementioned interviews, Folkman went on to add that there were “maybe 30 instant commerce players” across the US and Europe two years ago and now four remain.
“We expect that number to dwindle,” he stated. Folkman said he is forecasting an acceleration of market share for his firm due to reduced competition and that “Gopuff is a value-based option for consumers.”
Ladd concluded: “Great interview, Daniel. What’s next for Gopuff? I want them to acquire Ohi. I think Ohi is a perfect fit for Gopuff’s model. Most of all, they must improve their operations, supply chain, and logistics.”
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