On-Demand Local Delivery Startups — Glovo

One area of the FinTech sector where there can never be enough competition is the on-demand local delivery market. Even though there is a huge number of startups flocking to this industry in recent months, there are plenty of opportunities to create a successful business in the segment. Spain’s Glovo is the latest company to raise a lot of funding for their project.

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Glovo Delivers Goods To Your Doorstep

Consumers all over the world value convenience above everything, especially when it comes to mundane tasks such as shopping for groceries. It should come as no surprise then to find out the on-demand local delivery business is one of the hottest markets in the FinTech industry these days, with so many companies venturing into this space.

More competition in such a tightly-packed market segment is always welcome, but the sector is getting close to reaching a point of oversaturation as well. But there are still plenty of venture capitalists and industry experts willing to throw money at these startups. After all, on-demand local delivery services will become of everyday life at some point; the only question is who will come out on top.

Glovo thinks they have cracked the code to achieve great success in the on-demand local delivery business, and the company has seen moderate success since its launch in March 2015. Anything customers want from any shop or restaurant in the cities of Barcelona, Madrid and Valencia can be delivered to residents in less than an hour from placing the order.

To optimize the process of ordering and delivering the goods, Glovo uses a mobile application connecting the order to their nearest available couriers. Doing so results in better delivery times, as well as avoiding couriers to cover unnecessary distances while transporting the item(s).

With a flat delivery fee of €5.50, Glovo offers fairly competitive rates on the market. Additionally, the startup does not charge a fee on top of the store price either. The courier responsible for picking up and delivering the goods is paid 70–80% of the collected fee, and they can keep any tips they receive.

The plan is for Glovo to build a relationship with premium partners, and charge those partners a commission based on the products purchased by customers. Additionally, other companies and e-commerce platforms can use the Glovo API to offer additional delivery methods to customers.

“By using the resources that a city already has (citizens with free time), we have created a network of on-demand couriers that offer a solution for urban stores looking for a delivery service or for e-commerce sites that want to deliver in 60 minutes to their urban customers. Our goal is to create a hyperlocal marketplace with integrated immediate delivery.” — Glovo Co-founder Sasha Michaud explained.

Looking Beyond Mobile Availability

For the time being, Glovo is only available through its mobile application, although the company’s API will allow integration with just about any online platform. But there is one thing to keep in mind for all FinTech companies, and that is how the older generations are not always using a computer or mobile device for this kind of services.

Other types of availability for on-demand local delivery companies will have to be created in the near future. Whether this is through traditional methods such as paper advertising or taking orders by phone, is up to the individual companies to decide. But relying on online and mobile availability only will not be enough.

Source: TechCrunch / Newstip

Header image courtesy of Glovo