Buyk, a real-time retail service promising grocery delivery within 15 minutes or less, has launched in Manhattan with the aim to cover all five boroughs by the end of 2021.
Buyk’s offering is made possible thanks to its dark stores, each stocked with between 2,000 and 3,000 SKUs and strategically located to maximize order picking and delivery speed. The service will seek ultra-quick build of its user group as it promises no delivery fee, affordable prices and no minimum spend.
The dark store model promises solid returns, if implemented and scaled properly. A JPMorgan research report puts the potential margins at £3 per order in the long term, while average basket sizes range from £15-22 in the UK, compared to just £7.46 at a local corner store.
The model is suited to an urban audience, which values convenience in their busy lives. Buyk’s take on this phenomenon is to position itself as a part of city infrastructure rather than a service. Water comes from a tap instantly, so why shouldn’t groceries appear just as quick? And consumers have responded past the pandemic peak as the US share of online grocery sales continues to grow, and is predicted to hit 12% by 2025.
Buyk’s founders are hoping to use their experience to forge ahead in an industry that is currently stacked full of players, with $8bn in funding raised to date by Getir, Gorillas, GoPuff and others in the sector. Getir, in particular, has stood out, with a recent funding round giving the company a valuation of $7.5 billion, more than prominent, large-scale supermarkets such as the UK’s Morrisons and food delivery platforms like Deliveroo.
“What separates Buyk from all other rapid delivery companies is that they have a team of absolute experts who cut their teeth building what is arguably one of the best rapid grocery delivery companies in the world, Samokat”, explained Brittain Ladd, a former Amazon executive and supply chain consultant in a post on LinkedIn.
The service is the brainchild of serial entrepreneurs Rodion Shishkov and Sasha Bocharov, who previously founded Samokat, the fastest growing ultrafast delivery service in Europe with more dark stores than any other player outside of China.
Buyk’s plans certainty reflect Ladd’s confidence, with the company aiming to cover the whole of New York City by the end of this year, before expanding to other major metropolitan areas across the US in 2022. A pitch deck shown to Business Insider puts Buyk’s dark store numbers at 480 by Q3 2022.
Ultrafast grocery is a sector to watch over the next few years, as the pandemic has accelerated changes in shopping habits. This new market comes with a bitter fight between competitors for dominance and survival. Buyk throws its hat in the ring with an experienced team, dark stores, logistics and a technological platform. The race is on.