“We have no direct competitors in Ukraine”: interview with TOP Manager of Glovo startup
The international service to deliver “whatever you need” Glovo has been launched in Ukraine. The editor of AIN.UA asked Rami El-Refai, a Manager of Glovo responsible for expanding to new markets, a number of questions and found out why this startup decided to enter Ukrainian market, what challenges they faced with and what kind of objectives they set.
Why did Glovo decide to enter Ukrainian market? What was it that attracted your startup?
Now Glovo is in the phase of active expansion. For the last nine months, we have launched a new city on average every 7 days [Editor’s note: The original article was published on October 05, 2018]. We have a whole team, dealing with search and study of potential markets to launch the service.
While selecting the market, we take into consideration a multitude of indices, but the key ones are – potential size of the market and our unit-economy. We believe that Ukrainian market has a huge potential for growth and we will be able to make our unit-economy profitable in Ukraine.
Will Glovo initially operate just in Kyiv? What cities are you going to connect in future?
While expanding to new countries, at the beginning we launch the service in the largest city. Further, having studied the market specifics, we start expanding within the country. There will be no exception for Ukraine. After Kyiv, we plan to launch the service in a few more cities. Unfortunately, I am not ready to list them yet.
How do you estimate Ukrainian delivery market? What specifics does it have and what are the opportunities for Glovo?
We believe that the Ukrainian delivery market is still poorly developed. This is particularly true for food delivery.
Most of Ukrainians prefer to cook their food themselves. They visit restaurants not so much to eat, but more to have a good time.
However, we consider it as a huge opportunity. When users have a convenient way to order meals from their favorite places and get it in 30-40 minutes, we are sure that they will appreciate it and start changing their habits.
What are the key challenges that Glovo’s team faces entering the Ukrainian market?
Ukraine is some kind of unique country for Glovo. In most of the countries we rely on couriers, using two-wheeled vehicles. Unfortunately, in Ukraine two-wheeled vehicles are not so popular. Plus, here you have a cold and snowy winter. Therefore, I believe that the key challenge is to provide the platform with sufficient number of clients, particularly in wintertime. Anyway, I think that our team has sufficient experience and tools to cope with this challenge.
How much did you invest to launch a campaign on Ukrainian market?
We have invested enough and are ready to continue investing in Ukrainian market. We are very interested in the advantage of the Ukrainian market for the growth of our client’s base and delivery market as a whole. It is also critical for us to offer an outstanding user experience, and it will be our key focus during the first year. We are at the beginning of the long way and it would be incorrect to speak of numbers now.
It should also be noted that our relations with the Ukrainian market are bilateral: venture fund GR Capital, one of our investors in the last round, helped us to enter the Ukrainian market.
Are you going to open a local office? How many employees will work there?
One of the reasons of Glovo’s global success is our reliance on strong local teams. We are sure that no one can manage the service better than dwellers of the city. Therefore, we open local offices in all countries and employ local team. At the same time, central office continuously supports local teams. Thus, they achieve a synergy of global expertise and deep understanding of local realities. At the beginning, the Ukrainian office will employ 10-15 people, further the team will grow.
What are the local companies, which are your competitors? What is your advantage?
For today, there is no any service in Ukraine, which delivers the goods of different categories. However, there are the services, which compete with us in separate niches. Our advantage is that we provide a user with an opportunity to order almost anything via a single service. It can be meals from restaurants, goods from supermarket or flowers. We even have a button “whatever you need”. Having pushed this button, a user can write what he/she needs.
One more plus – you do not have to call us. You can make an order in the application Glovo. There you can also track the order in real time. In the services, where the order is made via the phone, such function is just infeasible. On the other hand, if a user wishes to clarify something, we have a first-line support. Specialists of the support service are ready to answer all questions at all stages of delivering the order and afterwards.
Is the delivery by Glovo limited by geography?
During the first two weeks, the service will be available just in the center. However, till the end of the year we are going to cover the whole Kyiv. These temporary limitations have certain reasons. We use a concentric model of expansion.
We start from a small area and increase it step-by-step. Therefore, let us say, in the area of Arsenalnaya and Kontraktovaya subway station the order can be made in the first day of Glovo’s operation, and dwellers near Levoberezhnaya and Berestetskaya stations have to wait a little bit. Such approach ensures correct distribution of operations and provides better client’s experience.
What is it that allows Glovo’s couriers to send parcels for an hour?
There are a few reasons. Firstly, the high level of “saturation” with partners: we strive for cooperation with a multitude of shops, restaurants, etc. Secondly, we actively work with couriers. The more partners and couriers we have, the faster we deliver the orders.
Technologies also play a critical role. Our IT system “learns” and gradually start optimizing logistics. On the markets where we are present for a long time (6 months is a long time for us), most of the orders are delivered for 35-45 minutes.
Glovo is an official partner of delivery from a number of places in other countries, for instance, McDonald’s. Have you already entered into any cooperation agreements in Ukraine? If so, what are these companies?
For us it is critically important that, using Glove, a user can order meals and goods from the best places and stores of the city. Therefore, now we actively invite partners to join our platform: restaurants, supermarkets, florists, etc. At the beginning, a user can have a limited choice, but, in time, it will be increased.
What income can Glovo’s couriers count on? Will the company pay bonuses like, for instance, taxi services?
Owing to the fact that we are pretty good at anticipating the demand. We can provide income security to couriers, dealing with our platform. We do not have bonuses, but we also have no delays in income payment. Incomes depend on the fact, how much time a courier spends on the platform. Couriers with a good rating have an opportunity to earn more.
Moreover, it is convenient for couriers to work with us. The courier’s mobile application is elaborated in details. It contains manuals for all stages of work on the order. We also provide couriers with full support for the whole period when they are online.
What are the goals that Glovo’s team sets on the Ukrainian market? What output does the company plan to achieve for the first year of work?
I think that we will have an uneasy, but very interesting year. Our key goal is to provide dwellers of Kyiv with easy access to their city. As time marches on, it becomes the most valuable resource of our lives. For this purpose, we will provide them with the things that they wish to receive from the city. We will bring it directly to the door of their house or office – at any time they chose.
Earlier AIN.UA posted the interview with Dmitriy Zaporozhets, the founder of Gitlab.