However, the company’s recent surge in volumes has not come without hiccups. While Instacart is still very small as compared to biggies like Amazon, Walmart etc., it is still expected to garner continued attention in terms of funding if it plans for an IPO. ![]() With a US$14 billion valuation and funding piling on non-stop, one would wonder if Instacart will soon look to go public or acquire a competitor to consolidate its market share. ![]() For Instacart, the company today has the ability to deliver the groceries from 25,000 stores across 5,500 cities in the US.I Investors too are eager to support it- recently, the company raised US$325 million, giving the company a US$13.8 billion valuation. However, those who stuck around to the base concept and its success in the longer run are reaping the benefits today, with additional benefits coming in during the Covid-19 pandemic. The companies like Peapod, launched in 1989 and Amazon fresh launched in 2007 were already providing grocery delivery while many players like Webvan which stepped-in the industry failed to make any mark and had to exit the business all-together. Instacart was launched in San Francisco in 2012, however, back then grocery delivery was still an evolving concept. It also made a net profit of about US$10 million in April, this year. As per the report of The Information, a US based digital media organization, the company’s customers purchased around US$700 million worth of goods in the first two weeks of April, helping reverse the company’s loss of US$300 million in 2019. The company says it plans to hire additional 250,000 workers over the next few months to keep up with the surging demand. The company has over 500,000 independent contractors which go to the stores to pick orders and deliver the items to the customers across the country. Add to this, the app downloads were also up by ~218% month-over-month in March 2020. ![]() Instacart’s demand in the last few weeks has been the highest in company’s history wherein its order volume soared by more than ~500% on YOY basis. The shoppers make money based on a somewhat complex algorithm, including factors such as distance from the store, how many items were ordered typically and weight of the overall order. Customers pay a delivery fee based on their size of orders and how fast they want the grocery to be delivered as well as a 5% service fee plus an optional tip for the driver. The personal ‘shoppers’ purchase the selected items from different local grocery stores and deliver them to customer’s door within the agreed time window. Instacart is an online grocery delivery service that charges a fee to connect local grocery stores and its shoppers. Given its footprint, large scale of operations and the partnerships that Instacart has associated itself with, it has established its reach to about 85% of all US households. ![]() Instacart has partnered with nearly every grocery delivery chain in North America. The leading competitor of these services in North America is Instacart. In the US, Amazon and Walmart were the leading players in the online grocery shopping over the past few years, but since the demand skyrocketed due to coronavirus, third party delivery services also got a chance to shine. We have witnessed the adoption of online grocery market, that was once projected to take five years, has in fact been seen in the last few months of the lockdown. Nevertheless, one sector that has seen an exceptional growth during these tough times is online grocery delivery. Thousands of businesses across industries are forced to shut down, work with reduced operations or announce partial closures due to outbreak of Corona virus in the US and around the world. Surge in online grocery delivery in the US amidst Covid-19.
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