‘Most people have around 30 breakfasts, 30 lunches, and 30 dinners every single month – plus snacks and coffee. Only very few business models have such a high potential number of transactions per month. This means we’re only scratching the surface.’ - Johannes Bruder, Delivery Hero
Everything started in Italy when in one summer King of Italy Umberto I and his consort Margherita of Savoy were visiting their Naples residence. On the Queen’s birthday they invited Raffaele Esposito – that time’s most famous chef over the palace to cook three types of pizza for the King and the Queen.
Coming up with an idea of the food delivery service is sometimes attributed to the noodles in Korea, Pizza Hut in the U.S. or a Chinese restaurant in Los Angeles. However, a real or a made-up story in 1889 in the royal residence of Naples has been recorded as an origin of a food delivery service.
The fast pace of the everyday life dramatically changed the necessities and priorities of a modern person. If back in the early days cooking was the consisting part of the everyday lives and for some - even a duty, slowly it has been replaced, at first, by ordering food by phone, then a few clicks on the website and in the end - using the smartphones. Ordering food through apps made cooking much easier, faster and more comfortable for those who never really fancied this process.
Restaurants’ own delivery service was later accompanied by a new method of delivery – independent, intermediate companies operating between the customers and the food places. During the time when the rest of the world was trying to set ordering food as part of their daily lives, in the Georgian families nobody could imagine that the dishes, cooked by the housewives, could ever be replaced. However, the Georgian market in 2014 saw emerging the first international company working in this field who changed the rules of the game.
‘Foodpanda’ was sort of know-how that time. ‘In the beginning we were selling just air, the only thing we had was a name. It was an interesting and thrilling experience. At first, restaurants found it difficult to cooperate with us. Some of them probably did not even know what they were signing on - they just knew that they were not losing anything much and had very little to risk. When the company became popular the restaurants started to approach us and expressed the will to work together. In the end, ‘foodpanda’ turned into a ‘success case.’ – says Giga Kerkadze, the head manager of ‘Glovo Georgia’.
‘Foodpanda’ introduced the food delivery service to the Georgian population. However, the quality of the service moved to another level when ‘Wolt’ and ‘Glovo’ appeared.
‘After ‘foodpanda’ was closed I was wondering which companies would show interest to step into the Georgian market. During this time there was a new post on LinkedIn that ‘Glovo’ had gathered some financial resources for expanding. I straightaway contacted company authorities. I received a feedback soon as well because they were also looking for the places where to expand and had Georgia as one of their potential markets. We contacted each other the right time. ‘Wolt’ had been operating already for six months up until that time and managed to become quite popular. This did not scare us – on the contrary it indicated that this field was very interesting. Georgia became the first country where ‘Glovo’ and ‘Wolt’ started operating as competitors, side by side. It was a challenge as we were facing high standards set by the strong competitor company but this gave us more motivation. When you have a high level of competition it plays well for the customers and pushes companies for faster progress and development. We constantly observe who has what kind of results in the region – Georgia can brag as it has been the leader in terms of operation as well as service.’
Delivering food made it possible to introduce one more new experience – possibility to order different categories of products. There are only a handful of companies that has multicategory in their service.
‘Unlike calling food online the customers are yet not used to ordering other products online. However, the main driving force for delivery service is still food. Money still moves in this field. Nevertheless, multicategory will also attract adequate attention soon. The most difficult part is to change habit. In order to become a habit, it needs to overcome early adapters. For instance, ordering from the supermarket is very comfortable – you skip the lines and avoid carrying heavy bags. Nonetheless, on my way home from work, I still go to the market and only later I realize how much time I waste. It is difficult to switch to new habits. Tbilisi, in the history of ‘Glovo’, is the fastest growing city. Georgia welcomed it very positively compared to other countries and took up delivery service. It is a fact that we like changes and we can adapt easily.’
App has a magic place where you can type and order a product that you cannot find in other categories. However, sometimes customers take magic too directly.
‘A girl once wrote that she wanted to get married and a courier turned up on her address. Someone also wanted somebody to pick their kids from the kindergarten. Despite having these kinds of ‘orders’ we are always faithful to the company promise – we are a friend that helps you with everything. Generally, every country has its specific requirement and company adapts to that market taking those peculiarities into the consideration. In the countries of Latin America there are not a lot of ATMs, thus cash delivery service is very popular – couriers are given the bank cards and they take out and then fetch cash to the customers.’
Our daily lives change constantly and become digitalized. If today’s generation cannot find what they are looking for in the apps it means it simply does not exist. Accordingly, every big company thinks of what a modern person will want and need in future. Thus, successful company will be the one that will find it out earlier than the customers.
There are plenty of questions around multicategory- how consistent purchasing every piece of things online will be. However, the past experience shows that if you offer a product the right way you can change and refresh even the very traditional and established habits rooted deep in the society. Let’s take an e-commerce giant ‘Amazon’ as an example. Its history started with a book. The founder – Jeff Bezos thought of the item that meant the same for every each of us and we did not need to physically see if we wanted to purchase it. The answer was a book. People who did not agree with this idea tried to prove that turning book pages could not be replaced by this innovative proposal. Despite this skepticism, ‘Amazon’ team took a risk and stuck to the idea that exactly the books would be the main driving force able to change the customers’ habits drastically. They turned out to be right. The books decided the fate for e-commerce and turned ‘Amazon’ into the ‘The Everything Store’.
Food delivery and taxi are the fields that attract the biggest portions of income for the tech companies and are, therefore, the most active topics. According to the 2018 research by a Swiss bank – UBS ,food delivery market is expected to increase by ten times which means its financial value is supposed to reach 365 billion USD by 2030.
‘The reason why today a lot of money is being spent in these spheres is that there is an ongoing battle who will win the market – when the market gets sated only then it will reveal who stayed victorious. Today the contest is not about current profits but about future market situation – which company is having what portion of the market. These kinds of companies look for their financial profits only after ten years time. Exactly the future is the pushing factor that makes this topic so much active. Making sizeable investments creates a big competition which on the large markets, with millions of customers, is very aggressive.’
In the U.S. during the 2009 financial crisis a phrase ‘Gig Economy’ appeared which meant a free market with temporary positions where companies collaborated with individual freelancers only for shorter period of times. Gig is a slang which used to be referred only to the musicians and meant a temporary job.
If during the crisis having multiple jobs was a solution, today ‘Gig Economy’ has become the part of the change of culture and business environment and suited the worldview of a lot of modern people. Some people prefer more flexible and free work schedule over more stable and traditional work types. Exactly the change of the working environment has made it possible for online, freelance platforms to emerge. One of these very first platforms was a mobile application for ordering taxi – ‘Uber’.
‘This is the generation that wants everything now and here. Every popular service nowadays is built according to the trends of this generation: you do not need to leave home anymore because you have ‘Amazon’, ‘Netflix’… thus, other companies also try to adapt to the way of life of the modern person.’
The answer to the question - ‘what else is it left out there to make people feel completely comfortable and satisfied?’ from the person very close to the technologies is quite unexpected:
‘Perhaps people most comfortably feel in the nature. Ray Kurzweil – an American inventor and futurist is famous for his predictions based on the knowledge. Ray is the biggest tech optimist who very clearly describes the process how the boundary between the nature and technology will fade gradually in his books. If our today’s development, unfortunately, is reflected in how we destroy the nature, the future will be opposite – people’s connection with technology will be directed towards the nature friendly attitude and humane purposes.’
The purpose of the project – ‘Business café’ by the consultation company ‘Insource’, alongside with facilitating to exchange the ongoing business processes and news among the heads of the different companies, is to introduce novice leaders. ‘TBC Insurance’ supports ‘Business café’ which is in progress in order the high position managers to share the up-to-date tendencies and experience with each other.
Author: Mariam Kanchaveli