On demand delivery app promotions

Together with the growth of consumer facing on demand delivery apps in the US, there has been an explosion of similar startups in Turkey. The leading players in the space so far are Kapgel where we’re investors, Getir, and Bol Bol. I wrote about Kapgel in an earlier post.

Each of the companies has a slightly different model. Kapgel fulfills consumer orders from a wide range of third party merchants including restaurants, grocery stores, retailers, and dry cleaners. Getir relies on its own inventory to deliver product categories like snacks, personal hygiene products, baby products, and pet foods. And Bol Bol delivers from third party restaurants and grocery stores. I’ve tried each service, and have had a pleasant experience with each one.

The space has clear network effects. Consumers go to where the products they want can be found and are delivered the fastest. This requires a lot of merchants (or inventory) and a liquid delivery network. The merchants (or inventory), in turn, want to be where there is the most consumer demand.

As a result of this market characteristic, there’s a good chance that we’re going to see a runaway market leader in the space a few years down the road. There will be competition which survives, but the difference between being the market leader and placing second or third may be an order of magnitude apart.

Since each company is aware of this, they’re investing heavily in promotional campaigns to attract consumers. First off, none of the services charge a delivery fee right now. Beyond this, in the last two days alone, Kapgel has offered a free cake mix (there are more free products lined up) and Getir has offered a 25% discount on all orders up to an order value of 100 TL. Bol Bol has a gamified point system that lets you collect points for liking different restaurant cuisines, favoriting specific dishes, uploading your credit card details, and sharing your product feedback with the company. These let you collect enough points to earn free product without even having to place an order.

I look forward to seeing how the space evolves over the upcoming years. In the meantime, these promotions make it a great time to be a lazy consumer.