Tuesday, December 1

Glovo will invest 20 million to compete with Amazon


A Glovo delivery man pedaling in Barcelona.

A Glovo delivery man pedaling in Barcelona.
FERRAN NADEU

Glovo strengthens its logistics line to compete with the giants of digital commerce in big cities. The company founded by Óscar Pierre has announced this Thursday a investment of 20 million euros for the year 2021 and thus increase its catalog of deliveries (from fashion to electronics), with the aim of expanding its turnover and reducing its dependence on food delivery at home.

Your bet to win the market is speed, with the commitment to deliver orders in 35 minutes. A kind of Amazon, but faster in delivery and with a more limited catalog. And to deploy all this, their strategy continues to pass through delivery men operating as self-employed workers, despite the latest contrary ruling of the Supreme Court censuring this labor model and the new law that the Government finalizes in this regard.

“Giving access to anything in the city” is the synthesis of Glovo’s new expansion commitment, as summarized by the manager of the Q-Commerce line, Daniel Alonso. The objective of the digital platform is for a customer to connect to the Glovo application from their phone and be able to buy anything from a hamburger, to a laptop, to a T-shirt or hand cream. And thus achieve a monthly turnover of 40 million euros, of which 10 million are from that logistics division that they intend to reinforce during the coming months.

Nowadays, the company’s distribution volumes are distributed in 60% of the hospitality industry30% from ‘online’ supermarket and the remaining 10% from ‘retail’; According to the Glovo spokespersons during the press conference this Thursday. And the will of the company with this new bet is to reduce dependence on the first division to gain total turnover, mainly in large cities. Well, its approach depends on a high density of orders and a growing number of subscribers to Glovo Primer (a system very similar to Amazon Prime).

More hours of work for the ‘riders’

Glovo’s strategy involves give out that new workload with the same delivery people with which it operates today. Mainly in those time bands in which food delivery orders are scarce, the so-called off-peak hours. What would happen for more hours of work assigned to the ‘riders’, as those responsible for Glovo have pointed out.

The digital platform continues to plan based on a labor model supported by delivery men who operate as self-employed workers, despite the already final ruling of the Supreme Court that states that this situation is fraudulent and that the ‘riders’ are false self-employed. In addition to the legislation prepared by the Ministry of Labor, which aims to clarify legal assumptions and speed up the time of judges and the Labor Inspection to censor and correct non-compliance

However, the commercial scheme towards which Glovo pivots is committed to increasing the workload of the distributors and their continuity. Not so much a mobile and much more intermittent mass of delivery men, who connect sporadically for hours and fight each other for orders. A shift that reduces in some organizational aspects the differences with more traditional delivery companies, which operate with salaried delivery workers.

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