Going to the grocery store is a huge hassle. But getting them delivered to you whenever you want… isn’t.
The growing trend of picking up your groceries after ordering them online or having the option of getting them delivered is becoming more of a social norm.
This market is just heating up. But there are already a lot of big companies and startups dominating the market.
If you haven’t heard of Instacart, it’s an on-demand grocery delivery company. And it recently raised $600 million in its latest funding round. The company now sits at a $7.6 billion valuation.
That’s pretty amazing for a company that only launched in 2012. Essentially, Instacart hires a personal shopper that’ll go through the grocery aisles for you. And they pick up the items that you listed on the company’s app. And they will then deliver it to your doorstep.
Instacart is making a name for itself. And it’s going head-to-head with Amazon. Amazon bought Whole Foods for $13.7 billion in 2017. Before then, Whole Foods had been Instacart’s largest grocery partner for online ordering and delivery. Many people thought that Amazon’s purchase of Whole Foods would be the end of Instacart. But that hasn’t been the case at all…
Amazon is growing its on-demand grocery business with its AmazonFresh service. But Instacart has continued to raise money and gain new partnerships. Instacart deals with more than 300 national, regional, and local retailers, like Kroger, Sam’s Club, Publix, Albertsons, and Walmart Canada. As of March 2017, Instacart had 135 partnerships.
The most recent round of funding for Instacart was led by D1 Capital Partners. Dan Sundheim, founder of D1 Capital Partners, said in a press release:
We believe that traditional retailers will lead the category online, as their brick and mortar stores are the most effective distribution centers for fulfillment of online grocery orders.
Instacart will thrive because it isn’t concerned with the fulfillment of any type of stock. And that gives the company an advantage. It’s one less aspect of the business that it doesn’t have to worry about.
The company works with 15,000 grocery stores across 4,000 cities. So far in 2018, Instacart has totaled $950 million. Instacart CEO Apoorva Mehta has said, “The reality is grocery is a tipping point. Back a couple years ago it was a question of if people will buy groceries online. Now it’s not an if, it’s a when.”
The idea of ordering groceries online and having them delivered is no longer a crazy concept. Mehta went on to say:
When you look at the sheer numbers associated with this market, where there’s near a trillion of groceries being bought, that puts into perspective the amount of capital that has been raised. It’s just allowing us to be ambitious.
People need food to survive. And sometimes, getting groceries seems like the biggest chore. So, why not have someone else pick up the groceries that you’ll need for tonight’s dinner? That’s one less thing for you to worry about! And it gives you more time to relax in your busy schedule.
This market is set to take off. Instacart is only one of the companies that will lead the way in the growing e-commerce market.
Until next time,
Jennifer Clark
Pro Trader Today