Glovo is heavily ramping up its dark stores business through a €100 million partnership with Swiss real estate investment firm Stoneweg.
The Spanish company has been rapidly expanding this division of its business, called Q-Commerce, providing speedy delivery from so-called dark stores, where retailers can store goods to be sold via Glovo.
Under the terms of the new partnership, Stoneweg will use Glovo data to select warehouses in certain markets to buy, these units are then rented out to Glovo to operate as dark stores.
Stoneweg, which is active across Europe, will invest €100 million in buying up spaces for Glovo dark stores. It has not invested in Glovo.
“We work together on choosing the location, they have a lot of experience in finding potential warehouses or real estate in the city. We have the data that tells us where is the ideal location in terms of the logistics and demand,” Glovo CEO Oscar Pierre said.
“For them it’s a great way to increase their real estate portfolio with warehouses that are more or less validated by our data,” he added. “For us it’s a great way to expand from the current 18 dark stores that we have to hundreds in a non capital intensive manner.”
Joaquín Castellví, Stoneweg’s head of acquisitions for Europe, said the deal is an “opportunity to offer our clients to diversify into a new class of retail asset”.
Glovo currently has 18 dark stores in Spain, Italy, Portugal and Romania and plans to reach 100 by the end of 2021. The warehouses are placed in locations that allow for speedy access to and from. Pierre said large cities like Madrid and Barcelona could have 10 to 15 dark stores each.
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Pierre explained that Covid-19 will permanently alter consumer habits, with people now expecting instant delivery.
Both frequency and penetration have soared over the last year. He admitted that some of those rates of growth will re-adjust post-pandemic but demand will remain high.
“Penetration has accelerated, it has reached what we expected it to reach in two years in a year. In frequency I think we’re seeing some unrealistic levels of frequency due to people being locked down at home. We think those frequency levels will go down a bit but not to the levels we saw before,” he said.
Pierre added that Glovo is not actively seeking new investors in the company currently and that the company is in a strong cash position after selling off its Latin American business last year.
“We’re in a good cash position now because we sold LatAm six months ago and that was an all-in-cash deal. We’re in a good cash position, the company is a lot more efficient burn wise than a year ago.”