The much rumoured Getir-Gorillas merger finally became official. Financial Times says the combined company is valued at US$10 billion – not far behind the current market cap of Grab or half of DoorDash.
The question is – while we know Getir is still aggressively promoting their way through in the US and other markets – will the company eventually become a profitable going concern?
We analysed the dark store model earlier this year, when Miss Fresh – China’s dark store forerunner – was imploding. The model, as we mentioned, could be valid but that demands extreme volume, density and operational efficiency.
According to a friend who heads one of the players in China, you need basically 3-4k orders per dark store per day (1.5-2km radius) to allow for efficient utilisation of your fulfilment fleet and optimised inventory planning. This is achievable in some cities where only one player dominates, but impossible in a competitive environment.
Of course, in other countries the city layout, spending power distribution, roads etc. are all different – so 3-4k orders in China as breakeven point might translate into different numbers.
Although two things are common:
- This is very hard;
- Big players will enter if any startups proves it can work;
As for Getir – Gorillas, let’s see how it pans out. A friend in the Momentum Works Community left this comment though:
“Two turkeys merging does not make an eagle.”
He meant the birds.