Gorillas isn’t the only fast-delivery application affected by these issues. Turancan Salur, Managing Director of Getir Europe, said: “Rising inflation and a deteriorating macroeconomic outlook globally have forced all companies, especially those in the technology sector, including Getir, to adapt to the new climate.”
Companies like Gorillas and Getir plan to burn through a lot of cash by aggressively acquiring market share, Gevaers said. “Then, at a certain point, it’s not your business that becomes interesting, it’s your customer base.” Salur says Getir has proven its business model can work, as it is in Turkey, the company’s first market. Many stores are profitable.
Gorilla workers in Belgium are losing their jobs, buffered by the country’s labor rules, which award full-time contract workers at least four months’ wages as compensation. Some office workers are employed by Belgian food delivery company Efarmz, which purchased Gorillas’ “Fast Commerce Local Business Intelligence,” according to a company statement. The company declined to disclose more details about the deal.
In Spain, Gorillas employees are nervously watching the fate of their Belgian colleagues. As in Belgium before the layoffs, they were told that the Spanish subsidiary had limited time to find a buyer or investor. About 300 workers in the country have been formally notified, suggesting their layoffs are imminent.
The app continues to work, but management is encouraging employees to look for new jobs, according to a current employee who works at the Madrid office and did not want to be named. “The warehouses are not receiving new products,” they said, adding that the number of orders per warehouse has dropped to around 20 per day. “They just wait until they’re out of stock.” Spain’s labor laws are not as lenient as Belgium’s. Gorilla workers there who face layoffs will be entitled to at least 20 days’ pay a year. Gorilla declined to comment on its agreements with individual employees.
Denmark’s Gorilla is also waiting to find out its fate, as the branch scrambles to find a buyer or capital injection. Over the past year, it has struggled to meet sales targets, with warehouses receiving only 70 to 80 orders a day, according to an employee who asked not to be named. They added that the area there also had staffing issues, with internal Slack channels often broadcasting requests for help from managers because not a single bike courier came to work. Gorilla declined to comment on what it called “day-to-day operational details.”
Rider groups in Belgium are concerned that Gorillas’ exit will give the impression that gig companies that employ staff on permanent contracts are not viable. “Many of us will be returning to work on platforms like Uber Eats,” said Camille Peteers, a rider at Brussels-based group Couriers Collective, adding that Uber Eats will not hire riders as employees. “While some announced they were leaving the market, Deliveroo believed in fast commerce and fast deliveries in Belgium,” said Rodolphe Van Nuffel, spokesman for Deliveroo Belgium, whose riders in the country are self-employed.
Gorillas said it believed its business would be profitable in about three months and the company would be profitable at the group level in about a year. But for analysts, Gorillas’ departure questions a more fundamental problem: The current economy of delivering apps doesn’t add up. As the companies scramble to take over big cities, they have taken questionable shortcuts, said Marc-Andre Carmel, head of global retail at consultancy Bain & Company. “They ignore the law of gravity and build businesses without a clear path to full profitability,” he said. “They promise super convenience, but in most countries, customer satisfaction is poor.” He added that a 10- or 15-minute delivery requirement sounds appealing in terms of marketing, but it creates a sense of urgency in the service. Great expectations, which are often disappointing. In December, Gorillas quietly scrapped its 10-minute delivery promise on its website.
“The market has been ringing alarm bells for all of these startups lately,” Carmel said, “reminding them that if they want to stay in business, they need to find a path to profitability and become better retailers and delight customers.”