Not just the rapid-delivery app Gorillas has been impacted by these problems. Getir’s general manager for Europe, Turancan Salur, claims that “rising inflation and the worsening macroeconomic outlook around the world have pushed all companies, especially in the tech industry, to adjust to the new climate.”
According to Gevaers, businesses with plans to aggressively buy up market share included Gorillas and Getir. Then, at a certain point, your clientele becomes more interesting than your business. Salur claims that Getir has demonstrated the viability of its business model by the fact that many of its stores in Turkey, the company’s initial market, are profitable.
The labor laws of Belgium, which guarantee full-time employees at least four months’ pay as compensation, provide a safety net for gorilla workers who lose their jobs. According to a company statement, a Belgian food delivery service called Efarmz has hired some office workers after purchasing Gorillas’ “local business intelligence on quick commerce.” The business declined to provide more information about the transaction.
Employees of Gorillas in Spain are anxiously awaiting the outcome of their Belgian coworkers. They have been informed that the Spanish subsidiary has a finite amount of time to find a buyer or investor, just like in Belgium before layoffs occurred. Approximately 300 workers nationwide have received official notices that they will soon be laid off.
The app is still in use, but according to a current employee who works in the Madrid office and spoke anonymously, management is encouraging staff to look for new jobs. They claim that “warehouses are not receiving new products” and that the average daily order volume per warehouse has decreased to about 20. They are merely anticipating stock shortages. Spain has less lenient labor laws than Belgium. Employees of Gorillas who are laid off there are entitled to a minimum of 20 days of pay for each year worked. Gorillas opted not to comment on the contracts it has with specific employees.
As the branch tries to find a buyer or a cash infusion, Gorillas in Denmark is also awaiting its fate. According to a worker who asked to remain anonymous, it has been difficult to meet sales goals over the past year because warehouses are only receiving 70 to 80 orders per day. The internal Slack channel frequently featured managers’ cries for assistance because not a single bike-courier showed up for work, they add. Districts there were also plagued by staffing issues. Gorillas chose not to comment on “the specifics of its day-to-day operations,” as it put it.
Rider organizations in Belgium are worried that Gorillas’ departure will give the impression that gig economy businesses that hire their employees on long-term contracts are unprofitable. According to rider Camille Peteers of the Brussels organization Couriers Collective, “many of us are returning to work for platforms like Uber Eats,” adding that Uber Eats does not employ riders as employees. Deliveroo strongly believes in quick commerce and flash deliveries in Belgium at a time when some have declared they are leaving the market, according to Rodolphe Van Nuffel, a representative for Deliveroo Belgium. The company’s employees in the nation are independent contractors.
According to Gorillas, its operations will be profitable in about three months, and the business as a whole will be profitable in about a year. Analysts, however, contend that Gorillas’ exit raises more fundamental concerns, namely that the current economics of delivery apps are flawed. According to Marc-André Kamel, head of consulting firm Bain & Company’s global retail practice, as these companies raced to dominate major cities, they took some dubious short cuts.
They created companies without a clear route to fully-loaded profitability, he claims, disobeying the laws of gravity. Although extreme convenience was promised, customer satisfaction is generally very low. He continues, “The 10 or 15 minute delivery claim sounds appealing from a marketing standpoint, but it raises a lot of expectations for service that are frequently unmet.” Gorillas quietly took down its 10-minute delivery guarantee from its website in December.
The market has recently been “sending a wake-up call to all these start-ups,” according to Kamel, reminding them that if they want to stay in business, they must find a path to profitability, improve as retailers, and delight customers.
