The platform of home delivery Glovo, founded in Barcelona in 2015, has announced this Tuesday that it will withdraw its operations from four countries in which it has failed to be a leader when you have a lot of competition in the sector. Glovo, which in recent years has based its business strategy on international expansion, declines to be present in Egypt, Turkey, Costa Rica and Uruguay. This decision is part of the objectives to get the company to be profitable in 2021.
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“this decision reflects the company’s strategy to consolidate its global position and redistribute its resources to the regions essential where it can be established as one of the cast leaders,” said Glovo in a press release. The four markets which is removed (involving eight of the 306 cities that was present until now) accounted for 1.7% of the gross sales of Glovo in 2019. “This has been a very hard decision to make, but our strategy has always been to focus on markets where we can grow,” explained co-founder and ceo of the company, Oscar Pierre, in the press release.
The decision to withdraw from markets, which in their day were announced as strategic comes a month after Glovo closed its latest round of investment. This, of € 150 million, was led by Mubadala, the sovereign wealth fund of Abu Dhabi. When it was announced this round of investment, Pierre emphasized that the company shares with investors the strategic vision to achieve the profitability of a company that has not yet reached the break even.
The announcement of the withdrawal of these four countries is the first decision after this round of investment, and confirms that Glovo is looking to expand in the places in which you can grow and establish itself as the leader in that, as for example Spain or Italy, it already has a substantial market share. In the case of Egypt, it is the second time that Glovo is removed from this country after having tried it already once. In Turkey, landed in march of 2019.
The company justifies its decision with the need “to continue strengthening the leadership position in the Southwest and Eastern Europe, Latin America and Africa.” This expansion goes in parallel to the court battle that keeps the company in the countries in which it is more consolidated as Spain and Italy for their model of work.
service offices
In parallel to this strategic decision, the platform division has announced this Tuesday a new service called Glovo Lunch, directed to companies and buildings of urban environments so that groups of people can eat tupperware containers of seasonal products and proximity for about six euros. The company co-founder Sacha Michaud explained that the platform has detected a spike of requests at noon.
