Rabbit boss Ahmad Yousry hits out at quick commerce critics
These are challenging times for the rapid grocery delivery space, with many once hotly tipped startups now laying off staff, exiting markets and scaling back ambitions in a post-Covid world.
Critics of this industry have been quick to claim it was an accident waiting to happen.
But one prominent player isn’t taking it lying down.
Ahmad Yousry, Chief Executive at Rabbit, a 20-minute convenience delivery startup in Egypt, which last year came out of stealth with a $11 million pre-seed funding round, said this week in a LinkedIn post: “Everyday I am bombarded by news and messages showcasing quick commerce as a struggling industry with a need to pivot.”
He argued: “Do not blur the line between execution and the model. No one doubted the social networking sector despite the fails of Myspace and Google Plus (hi Facebook).”
“No one doubted the FinTech space despite the fails of Fast and LendUp (hi Revolut). No one doubted the HealthTech space despite Theranos (hi Relay Therapeutics).”
Yousry continued: “Last year with an excess of capital, a lot of smart people started building amazing businesses.”
“Some in the quick commerce space had different approaches to tackle the same customer problem. and some have unfortunately failed - and that's OK! Because quick commerce is a really hard business to build and run.”
Rapid delivery, he noted, is essentially three businesses duck tapped together: a warehousing business (think Flexport); logistics (think Uber): and supply chain and e-commerce (think Amazon).
“If you run them right, you stand to make a lot of money, run them OK and the cash burn will obliterate you,” he wrote.
“Another important point, not all parts of the world are the same, in developed markets with a high minimum wage, the business needs massive scale and efficiency to offset the labour cost (or aim for autonomous, drones or robots), which isn't the case in emerging markets. Simply put, the struggles in NYC don’t translate to MENA.”
On the subject of whether customers really need deliveries in 20 minutes, and therefore should the aim be 30+ minutes instead, Yousry countered with: “Technically we can, but we won't. because faster deliveries cost less.”
“The more deliveries per hour we do, the lower the cost per delivery is. and with order grouping under 20 minutes we are bringing the cost down even more.”
He concluded: “Customers want things instantly, think Uber, Netflix or Spotify. Do you really think in 10 years you will be buying things next day? Instant retail is here, and it’s just getting started.”
