“Before the war, Ukraine was our third largest market.” Interview with Sacha Michaud, Glovo
In the mid May 2023 the co-founder of Glovo delivery company Sacha Michaud visited Kyiv and spent three days in Ukrainian capital. The first purpose was to visit the Ukrainian team. A hub in Ukraine is responsible for the entire region, in which Glovo, in particular, operates: Ukraine, Georgia, Kazakhstan, Kyrgyzstan, and Armenia. The second was to launch “Glovo for Couriers” (a program that sets new standards of social law for couriers in Ukraine) and to choose and award the winners of “Glovo Ukraine Startup Lab” — a competition of the best Ukrainian startups.
In the interview to AIN.Capital, Sacha told about how Glovo is operating in Ukraine during the full-scale war and why this market is important for the company. He also shared the details about the company’s plans for further expansion and development in the CEE region.
In which countries is Glovo currently operating? What markets are the biggest in terms of business?
Glovo operates in 25 markets across Southern and Eastern Europe, Central Asia, and Africa. We’re in over 1,500 cities with over 4,000 employees and 60,000 active couriers on the platform. And finally, we have over 170,000 partner stores and restaurants on the application, and 90% of those are small businesses.
Our largest market is Spain. Before the war, Ukraine was our third largest market and continues to be our core market.
What countries does the company consider for further expansion?
We regularly evaluate the competitive landscape and economic conditions across countries to make decisions for future expansion. Before entering a new country, we consider three main criteria. The first criterion is how developed our industry is in this country, whether there is a need for delivery services, and whether competitors are there. We also study the prevalence of smartphones in the country because no one can make an order without one.
The second thing we evaluate is the general development of the market, related sectors such as banking, and the number of partners with whom we can cooperate. The third thing is demographics. And the political situation is no less critical.
At the moment, we are focusing on growing the markets where we currently operate.
What is the share of Ukraine in Glovo’s overall business? How important is this market to the company?
Ukraine is essential to Glovo. Currently, it is one of our five largest markets and a strategic hub for regional development. In addition, Kyiv hosts one of our four global technology hubs, with the other three in Barcelona, Madrid, and Warsaw.
How did the full-scale invasion of Ukraine affect Glovo? Did you consider exiting the Ukrainian market, and why did you decide to stay?
Well, first of all, we stopped operations here. Our priority was and remains the safety of our team, couriers, partners, and users. However, within a few days, the local team said we needed to resume business as we’re an essential service. Сouriers started using messengers to do social orders. Restaurants and shops wanted to continue working, as well. So all that made us reopen very quickly. We developed a phased recovery plan, starting with the safest areas. We also adapted our technologies. For example, we do not operate in cities when there is an air raid alarm.
What dynamic are you currently observing in Ukraine? How are things going for Glovo in this country, considering constant air raids, inflation, and consumer attitudes? Are you planning to invest in this market before the war is over?
We are proud of the Ukrainian team — they exceeded all our expectations regarding business recovery in the conditions of a full-scale war.
Despite all the challenges — shelling, blackouts, temporary suspension of the activities of some partners — as of March 2023, the Ukrainian team managed to reach 100% of the pre-war level of business and continue to grow.
All essential indicators increased, from turnover to the number of orders. In some cities, orders rose 2-3 times over the last year. For example, in Khmelnytsky, orders increased by 318%; in Vinnytsia by almost 300%; in Ternopil by 275%; in Rivne, Ivano-Frankivsk, and Lutsk by nearly 250%; and in Chernivtsi by 200%.
Moreover, the Ukrainian team started several new services for users and, at the same time, supported the development of local partners, in particular SMEs. Thanks to this, Glovo remains Ukraine’s largest multi-category delivery service, cooperating with over 8,000 partners in 35 cities. And this shows how much the team could adapt to new realities.
How is Glovo developing in the CEE? In 2021, the company acquired competitors in Bosnia-Herzegovina, Bulgaria, Croatia, Montenegro, Romania, and Serbia. How are these markets doing? Did those investments pay off?
At the end of 2021, Delivery Hero acquired the majority stake in Glovo. Joining forces with the market leader created unique conditions to grow with a long-term vision.
We have a strong market position and are currently leading in more than ⅔ of our markets. Moreover, we see great potential for the future of on-demand delivery and continue to see strong growth in the countries mentioned above.
What cultural differences are you facing while expanding in Europe? How did you overcome them?
Each market where we operate is unique, which is why we rely on local expertise to grow in those markets. We listen to local teams and get their feedback about the regions, countries, and cities where we operate as we strive to be a dynamic technology company that can make quick decisions, make adjustments, and have a strategic vision for the long term.
Do you have active competitors in CEE? Who are they, and what part of the market does Glovo occupy?
The on-demand delivery business is a highly competitive industry. However, Glovo is unique as we do not only focus on restaurant or grocery delivery like many of our competitors but we are truly multi-category. Having been multi-category from day 1, Glovo has witnessed this development first-hand, and consumer demand for other retail categories is getting stronger. In 2022, we saw a 120% increase in non-food orders by Glovo users across our markets.
Is Glovo profitable in the CEE markets and particularly in Ukraine and Poland? Can you share the numbers?
Glovo has seen strong growth in both markets, and we continue to see an increase in demand from both partners and customers.
The business in Ukraine is profitable. Moreover, it is in the top 5 for Glovo not only in terms of the number of orders but also in terms of effect and contribution to the overall business in terms of profit.
What countries are the biggest markets for Glovo in CEE? What are the next steps for development in the region?
Ukraine is one of the largest markets in the region. We also see strong growth in other countries like Poland and all across Eastern Europe. We will continue to invest in Ukraine and other markets to build our market position.