The Uruguayan delivery app has entered the quick commerce space with the aim of reaching a wider audience. It also plans to reach more cities in Latin America, to grow further within the 15 countries where it operates. Can this unicorn grow without losing focus on its brand identity with customers?
The delivery platform PedidosYa has been quite active in recent months . From a service of delivery people on foot, called " walkers ", who seek to avoid delays in the food delivery service From peak hours in Santiago de Chile, to advertising campaigns in Argentina that seek to attract both end customers and restaurants, to its association with other local platforms, such as Giftéalo in Peru, the firm does not rest in its reinvention.
Conceived in 2007 as the final project for the entrepreneurship course of three students from the ORT University of Uruguay - Ariel Burschtin, Álvaro García and Ruben Sosenke - today this platform with a self-explanatory name has a presence in 15 countries, with more than 5,000 collaborators, more than 114,000 associated businesses and over 350,000 delivery people.
“We are the leading technology company in delivery and quick commerce in Latin America,” says Juan Martín López, Chief Operating Officer (COO) of PedidosYa in the region, adding that theirs is a simple, fast and easy-to-use technological solution that has transformed the market, making the daily lives of users simpler.
Quick commerce , meanwhile, is a natural evolution of e-commerce , driven by consumer demand for faster and more convenient deliveries. “This model, which emerged in China, was adopted globally, including Latin America, where companies such as PedidosYa managed to capitalize on the trend to meet customers’ expectations of immediacy,” says Marcos Pueyrredón, a specialist in digital retail commerce and president of the eCommerce Institute.
THE JOURNEY OF AN APP
Latin America is proud of the success story of its unicorns. As such, PedidosYa's path is one of constant growth and reinvention.
“We are always innovating and evaluating business opportunities, as long as it is attractive and sustainable over time, growth is part of our DNA,” says López.
The company started in 2009, with the launch of the first prototype in Uruguay, which consisted of 40 restaurants and telephone operations. Two years later, in 2011, the app for iOS and Android mobile phones was launched. At the same time, the company began a frenetic expansion throughout Latin America, landing in Argentina and Chile in 2010 and in Paraguay in 2012.
In 2014, five years after its launch in Uruguay, PedidosYa joined forces with the German company Delivery Hero and received an investment of US$ 43 million. Three years later, Delivery Hero's IPO took place and its subsequent listing on the Frankfurt Stock Exchange. That same year, PedidosYa received an investment of US$ 279 million and acquired the Apetito24 brand in Panama.
Also in 2017, PedidosYa's own delivery service was born and, a year later, it became a multi-vertical application when new business segments were added: supermarkets, beverages and pharmacies.
It continued its expansion with Bolivia in 2018, the Dominican Republic in 2019 and Venezuela in 2020. That year, when the pandemic broke out, delivery was declared an essential service in several countries and PedidosYa saw its adoption and growth accelerate in the region.
“In 2020, we launched our own online supermarkets PedidosYa Market, which operate in quick-commerce mode , and two years later, in 2022, we launched the PedidosYa Plus subscription program and the pick-up service in stores. Also, in 2022, PedidosYa Credits for businesses will arrive,” López lists.
In 2021, it acquired Glovo's operations in the region and began operating in Peru, Ecuador, Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua. Meanwhile, in 2022, Delivery Hero acquired the main verticals of the Salvadoran platform Hugo, thus strengthening PedidosYa's presence in Central America and the Caribbean.
Three countries that are absent from the company's radar are Mexico - where UberEats has a strong presence, with 69% of the market share - Brazil - where iFood has 86% of the preferences - and Colombia - the birthplace of Rappi, which has 78% of the delivery services market -, although the platform specifies that it prefers to focus on the nations where it already has a presence.
“Our goal is to grow in each of the countries in which we are present, leading in each postal code and taking care of our team and the ecosystem,” says the COO of PedidosYa.
CONSOLIDATION PHASE
For experts, delivery apps are in a transition phase.
“There are some like DoorDash, Uber Eats, and Grubhub that are in more advanced stages, and others that are still in the growth phase. [Meanwhile] Delivery Hero, the parent company of PedidosYa, is still experiencing financial losses,” Luis Llanos, a professor at the industrial engineering department of the University of Chile, told AméricaEconomía.
Indeed, PedidosYa's parent company announced at the beginning of December that it would hire its freelance Glovo delivery drivers in Spain as full-time employees, affecting its profits by around US$105 million and causing it to lose almost 10% of its share value.
However, the academic points out that its strategy emphasizes achieving positive results soon. “In this regard, Korea and America are considered as examples by the same company in its reports to investors,” adds Llanos.
“Globally, the industry should enter a consolidation phase, and Latin America should not escape this trend. There are global players who will want to enter the region. On the other hand, there have always been, and will continue to be, local operators, particularly in smaller cities, who can scale up if they see opportunities,” Llanos explains.
The researcher points out that there are certain segments such as supermarkets and large retailers that will possibly continue investing in promoting their own applications. In gastronomy, which is a very fragmented industry, this seems unlikely and it will possibly continue to be the strongest pillar of the business.
What is clear is that, although worldwide delivery platforms or apps , which received an additional boost from the 2020 pandemic, growing by 63%, are showing signs of maturity, on the other hand, they have suffered a decline in their expansion, which a study by the consulting firm Euromonitor International places at 12% for 2023, due to the fact that consumers globally affected by inflation returned to in-person restaurants and supermarkets.
This decline was most pronounced in the delivery of prepared food, with growth of 8% globally.
In response, platforms are trying to promote their value proposition, Euromonitor's analysis says. As a result, delivery services have begun offering incentives such as discounts on dining at restaurants and the ability to order deliveries from multiple merchants simultaneously at no extra cost.
Others are adding subscription services and expanding their retail media networks. In emerging markets, many players are adding financial and payment services to their offerings.
Given this reality, PedidosYa recognizes that the markets in Latam are very competitive.
“It is very important to connect with consumers and the issues that concern them. Most of them are looking for simple solutions that make their daily lives easier and prices that are always convenient. In this sense, PedidosYa responds to these needs with consistency, people know us, prefer us and trust our service,” emphasizes Juan Martín López.
Customer experience remains the essential differentiator in this business.
“Companies need to make sure their app is easy to use and gives customers a good experience when ordering. This isn’t just about achieving good delivery times, it includes offering customers personalized recommendations based on their preferences, with a reliable customer service team available 24/7,” says Luis Llanos.
The academic also says that entering into other services, such as those in the fintech sphere , “is a complex proposition given that it is a different business. There may be a loss of focus on the company and of brand identity with customers.”
GROCERIES AND FAST TRADE
PedidosYa wants its strength today to be what is known as the e-groceries market , which consists of the purchase of food and supermarket products through digital platforms.
For the firm, this is a method that has proven to be “an efficient and convenient solution for modern consumers because it is a unique and innovative experience. We see that the traditional way of shopping at the market, that is, in person, once a month, for a large basket of products, has given way to online purchases of fewer units, but several times a week. In this category, PedidosYa Market is the leader,” emphasizes the firm's COO.
At the same time, quick commerce in the region saw a year-on-year growth of 34% in 2023, according to the Statista platform, and its market in Latin America is projected to reach a value of US$4.10 billion this year.
“PedidosYa’s contribution to this segment is increasingly important and powerful. [The platform] is positioned to capture a significant part of this growth thanks to its robust infrastructure and adaptability. They are at the forefront of truly innovative technological implementations. For example, personalizing the experience with artificial intelligence,” says Pueyrredón.
The development of PedidosYa's business is evidence of this paradigm shift in online consumption , since according to the results in 2023, PedidosYa Market grew approximately 50% compared to 2022 and represents close to 20% of the company's total gross value (GMV).
Today PedidosYa Market has more than 150 stores located in 91 cities in 14 countries with a average of 5,000 SKUs per store plus a proprietary distribution model that allows deliveries in an average of 10 to 15 minutes. The goal for 2025 According to India, the COO will be expanding the range of products, especially in categories such as 'Fresh', which includes fruits, vegetables, meats, dairy products and frozen foods, and in 'Personalization', a term that aims to ensure that users find on the platform what they need at that moment, so that the user experience is increasingly better and of greater value.
“We are convinced that quick-commerce and delivery will continue to grow in the coming years and our goal is to remain leaders in the region, consolidating our position in the markets where we are present and expanding into new territories, generating more and more opportunities for the communities where we operate (…) Our mission remains intact: to continue making the daily lives of the platform users simpler,” López concludes.
