The company has spread small warehouses across the capital stocked with about 2,000 items and uses bike couriers to deliver orders. Its strategy is to build market share by being a digital convenience store—the place consumers turn to for ingredients, toothpaste or even a packet of condoms delivered straight to their door, the report says.
Founded two decades ago as a search engine like Alphabet Inc’s Google, Yandex has since upended the local taxi market and launched a variety of other digital services, including restaurant deliveries, as it surpassed 127 billion rubles ($2.72 billion) in sales. The latest push comes as Russia’s once-slow embrace of e-commerce accelerates. While many companies offer delivery of online grocery orders, consistently doing it this quickly breaks new ground.
“We saw that retailers themselves are too slow to deliver, while delivery startups that work with third-party stores don’t have real-time access to their assortment and often have to replace goods in the order,” Maxim Firsov, head of the division that includes Lavka, said in an interview. “Therefore, we focused on developing our own mini-warehouses with super-fast delivery.”
Yandex entered the Russian online grocery business last year, looking to tap a market that researcher INFOLine estimates could surge about fivefold to 200 billion rubles by 2023. The two largest players right now are Utkonos and Perekrestok.ru, a unit of X5 Retail Group.
There are loads of services where orders are picked from the shelves of stores, but on-demand grocery delivery is a relatively new retail model. Getir, backed by Yandex Chief Executive Officer Arkady Volozh, uses it in Turkey, while GoPuff is developing a similar business in the US. Amazon.com Inc. has Prime Now, which offers two-hour delivery. Other companies, like US-based Instacart Inc, say they can get goods to customers in half that time.
Yandex initially sourced goods from retailer Metro AG before moving to direct contracts with distributors and manufacturers. It ended 2019 with 50 warehouses and aims to cover all of Moscow with about 200 by the end of this year, while also expanding the service to St Petersburg.