Zona Chen, a graduate student at New York University, just got her groceries delivered to her front doorstep within 15 minutes of placing the order on Getir. She only paid $5 for two bags of groceries, thanks to the free $25 given to first-time customers. Right after getting the groceries, Chen sent her boyfriend an invitation to use the app, which would give both her and her boyfriend a $25 credit to use.
“ I think I only spent like $20 on $100 worth of groceries this month,” said Chen, who has benefited from the growing legion of rapid grocery delivery services, which kicked off in the Big Apple since the pandemic began in March 2020
There’s Getir, Gorillas, 1520, Buyk, and JOKR and Fridge No More–all hoping to make inroads in an industry valued at $192 Billion by 2025.
To get there, however, they’re relying on giveaways. Free credits here, free delivery there. While those discounts may indeed drive people to try a new service–it remains an open question of whether they’ll buy it. For startups these incentives are risky. Sure you get people in the door, but they may not be the people you want–that is, like Chen, they may only stick around long enough to get a freebie.
Already, companies are feeling the weight of these tough customers. 1520, one of the fast grocery NYC-based delivery companies that emerged in the last year, has shut down after burning through around $8 million seed funding from venture capital firms.
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