Ride hailing and merchant delivery services have some common operational characteristics so it’s no surprise to see Uber’s acquisition of Chilean company Cornershop.
Demand for grocery and other on-demand retail delivery is spiking in the U.S. and elsewhere. Big players such as Instacart, DoorDash, Grubhub, and Postmates are jockeying for position to grab as much market share as they can. Uber already runs its own restaurant delivery service, Uber Eats, and now wants to bulk up with Cornershop, whose main markets are in South America and Canada.
This is another example how mobile order-and-pay functionality continues to drive e-commerce sales across a variety of verticals. Expect 2020 to feature more deals as volume and scale are necessary for delivery players to have a chance at surviving in the long term.
A New York Times article, excerpted below, discusses more on this topic:
Uber has acquired a majority stake in the grocery delivery start-up Cornershop for an undisclosed sum, the company announced on Friday, as it seeks to build its food delivery business.
The company has looked to expand beyond ride-hailing, particularly since its troubled debut on the public markets in May. Although the growth of its core business has slowed, Uber is building its food and freight delivery businesses, as well as expanding into bicycle and scooter rentals.
Cornershop is active in Chile, Mexico, Peru and Canada, and Uber plans to add other markets, including the United States.
“We’re excited to partner with the team at Cornershop to scale their vision, and look forward to working with them to bring grocery delivery to millions of consumers on the Uber platform,” Dara Khosrowshahi, Uber’s chief executive, said in a statement.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
