Page 5 - bne_Tech_09_2020

Leaders
September 2020 www.intellinews.com I Page 5
Mail.ru Group and Sberbank invest again in food delivery
Russia’s Mail.ru Group and Sberbank are increasing their stake in food delivery service Local Kitchen (‘Kukhnya na rayone’) through their joint venture O2O, reports East-West Digital News (EWDN).
After the acquisition of a 30% share in May for nearly $3.9mn, O2O is to own 84.7% of the company after deal completion, scheduled for Q4 2020.
Some of Local Kitchen’s services are already integrated into O2O: “For instance, you can order a meal from Local Kitchen via Delivery Club,
and get it free of charge within 15-30 minutes,” explains Mail.Ru, while “Local Kitchen users will not need to waste time registering in the Local Kitchen app, as they will soon be able to log in using Sberbank ID or VK Connect.”
The service currently operates 34 kitchens in Moscow, handling daily over 20,000 orders – breakfasts, lunches and dinners – for local residents. The meals may be delivered by bike “as quickly as in half an hour, or even faster.” In 2020, three years after company launch, Local Kitchen is “set to reach almost all Moscow neighbourhoods, and its revenue is expected to exceed RUB3bn [$40mn],” according to Mail.Ru.
Local Kitchen has developed “a smart system”
to forecast demand (among “more than 3,500 dishes”) and plan food supply. The system takes into account seasonal factors, upcoming holidays and local food preferences.
“The pandemic, which has dramatically transformed the global economy, primarily affected the efficiency of conventional business models. Recent months have shown that the best survivors were those companies that focused on the evolving customer habits and tastes and tried to quickly meet their needs, shaped overnight by the new normal we all have faced. Even though customers were gradually returning to the lives they used to live, they stuck to their new habits. We believe that Local Kitchen is a perfect example of the synergy between the business model flexibility and the desire to anticipate customer preferences,” said Lev Khasis, first deputy chairman of the executive board at Sberbank.
Mail.ru’s archrival Yandex also operates a food delivery service, called Yandex.Eda (Yandex.Eats), following the acquisition of the start-up Foodfox in 2017. More recently, the company launched a new service called Lavka, spreading small warehouses across the capital.
Several start-ups also operate in this field. Among them are iGooods, which attracted nearly $5mn
in summer last year, and Elementaree.ru, which secured an identical amount in April 2020.
However, neither a booming demand nor generous funding are enough to ensure start-up success. In late 2019 and early 2020, no fewer than three delivery start-ups shut down, as noted by East-West Digital News.