Existing platforms offer on-demand delivery for food and grocery only.
Majority of local stores can only reach customers in their neighborhoods.
More expansion anticipated as growing demand for food takeout/delivery had already boosted the market in Western Europe to £18.4 billion (about US$25 billion) in 2015.
Network through partnerships
Glovo identifies the market potential of prospective retail partners and establishes profitable partnerships with both physical stores and e-tailers. For example, 90% of its existing partners do not offer direct delivery of goods to their consumers. Glovo offers API integrations into the online stores of the retailers to help them to increase delivery capacities and to decrease delivery times.
Use of couriers in a sharing economy
Glovo uses the same model as Deliveroo to build its workforce. The Glovo couriers, aka Glovers, are independent workers who get to keep 70–80% of the delivery fees plus any tips. They can also choose their working days and times. The average working time for a Glover varies from two to three hours a day, giving them the option to take on other jobs or activities to supplement their income.
Work flexibility is needed by freelancers and independent workers, especially for the younger ones like students. New job trends indicate that more people nowadays prefer to have more freedom, flexible working hours and multiple sources of income.
The number of people who have become Glovers is growing exponentially. That’s a key success factor in its business model since couriers are essential to the platform’s success, where both marketplace and workforce should grow at the same pace to guarantee a scalable business model to compete with other players in the market.
Glovo earns fees from its “premium partners” and e-commerce partners who pay for the use of the platform services. Its business model does not rely on charging consumers, but seeks to boost orders and retain customer loyalty by striving to lower delivery charges for larger quantities.
Rapid expansion and international growth
Glovo has to grow rapidly because of the intense competition in the market. Most of the company’s fundings have been designated for international expansion. Glovo has acquired Italy’s Foodinho to quickly penetrate the Italian market by converting the food delivery platform into the Glovo business model. This has been by far the winning formula for Glovo’s rapid growth.
Focused on B2C
Glovo offers incentives to users who order from its app, positioning itself as an e-commerce platform for express shopping and fast deliveries. It’s not part of its strategy to enter the more specialized B2B logistics market where it lacks the same competitive advantage as for the B2C ecosystem.
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March, Glovo registered its first order after launch in Barcelona.
September, Glovo launched operations in second city Madrid.
November, expanded rapidly with launch in third city Valencia.
March, received seed investment of €140,000 in same month as launch.
November, secured second round of investment of €2 million.
On-demand delivery services was a complicated and difficult sector for attracting investors.
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Armed with a total disclosed funding of €37.1 million, Glovo has expanded to nine cities in Brazil, four in Argentina, Lima in Peru, Panama City, San José in Costa Rica and Santiago in Chile. In Europe, Glovo spans across 26 cities in Spain, 11 in Italy, Lisbon and Porto in Portugal and Paris in France.