Yango Deli has arrived at doorsteps in London, entering a new global race, quite literally, to win customers.
The ultrafast delivery arm of Russian tech powerhouse Yandex has started operations in London, according to an announcement today. It will deliver fresh produce, pantry staples, freshly baked pastries, alcohol, personal care products, housewares and other items with delivery times of about 15 minutes.
Yango Deli will begin operations with four dark stores in the British capital covering some 1.4 million potential customers. The group operates more than 400 dark stores in total, with networks already in Paris, Tel Aviv and domestically in Russia. The move to international expansion builds on the Yandex.Lavka brand in Russia which operates in five Russian cities with a total population of more than 25 million.
The market for ultrafast grocery delivery is set for rapid expansion, as retailers increasingly invest in methods to capture time-conscious urban consumers. Delis and grocers can offer previously unattainable delivery speeds by using dark stores, which are warehouses dotted around residential areas, that serve as local hubs. Yandex, which has seen rapid expansion in Russia, will seek to leverage its success as a competitive advantage in international markets.
“As a part of the Yandex ecosystem, Yango Deli is an established player in an industry largely dominated by new startups seeking investment,” Head of International Markets for Yango Deli Maxim Avtukhov said in the statement. “We benefit from our own tech solutions, which facilitate our intelligent supply and demand planning, predictive assortment selection and effective picking and delivery routing.”
In addition to supermarket quality and a wide choice of brands, Yango Deli is piloting the delivery of freshly cooked hot meals – a first for London’s ultrafast grocery sector. The service operates in London’s Bethnal Green, Battersea, Bermondsey and Acton neighborhoods and will expand in coming months, according to the statement.
Yandex.Lavka / Yango Deli posted an annualized Gross Merchandise Value (GMV) run rate of approximately £255 million in the second quarter of this year, up 2.3x year-on-year. GMV is a standard metric for measuring the health of an e-commerce operation.
The key to the ultrafast delivery endeavor is to nail down the logistics in order to attract new customers. Current upfront investments, such as Yango Deli making inroads into London, are basically all about customer capture. Greater profitability will come later if success allows for the model to scale up.
Yango Deli has entered the race in London, and with the benefits of Yandex backing and international experience, it may enjoy certain advantages that will help it to succeed versus peers. That said, it’s also part of a larger race to structurally change the way we approach shopping. And as far as that goes, there is a lot of work ahead.