Kurly, or Market Kurly, raised $150 million in their most recent financing round. The rush of investments comes as the global economy navigates the uncharted waters of a post-coronavirus market. Kurly provides regular, scheduled deliveries of fresh groceries within South Korea. Established in 2015 by veteran analyst Sophie Kim, Kurly does more than simply deliver groceries from local markets. Instead, Kim built a logistics powerhouse that ensures consistency and quality in their deliveries. To do so, they partner with specific suppliers for each product type.
Traditional supermarkets in South Korea understand the need to gravitate towards e-shopping. However, due to their focus on brick-and-mortar logistics, they run into persistent supply issues. Their use of in-store employees and on-site inventory results help limit unavailability or substitution. Kurly’s interface comes from an e-shopping pedigree, ensuring that the site only shows what is available. As a result, Kurly more closely mimics AmazonFresh than Instacart or other delivery services.
Grocery Sales Soar as Retail Sales Dive
Kurly’s envious position is partially the result of a new economic environment. U.S. retail sales dropped 8.7% in the month of March alone – more than doubling the previous record. As much of the developed world enters quarantine, retail shopping is an extreme low priority. While the chances are slim, it is possible to contract COVID-19 from delivered goods. For many, this is a risk they are not willing to take.
In contrast, groceries are still an absolute requirement. While the average consumer can avoid most retail purchases, they still need to eat and obtain basic household supplies. The sudden spike in grocery sales shows an emergence of a “stockpiling” mentality in first-world countries. Consumers are facing scarcity for the first time and straining supply lines. Further, the hesitance to shop at physical locations extends to grocery stores despite the surge. As a result, grocery delivery services are seeing an unprecedented boom.
The Food Delivery Renaissance
Following on the heels of the emergence of ride sharing and the gig economy, food delivery services expanded quickly over the past several years. However, the current environment created the perfect catalyst for an explosion in demand. As established services like Instacart struggle to keep up with demand, other services are looking to capitalize. Uber Technologies, Inc.’s (NYSE: UBER) UberEats and Doordash both expanded their service to include grocery shopping. Lyft, Inc. (NASDAQ: LYFT) recently branched out as well.
The new offerings provide more than just groceries to consumers. Drivers dependent on ride sharing revenue can easily shift into the grocery delivery market. As unemployment skyrockets, these opportunities are priceless. Further, the pandemic shows few signs of slowing – meaning this economy may be here to stay for the near future.
Article By: Adam Stone