In the increasingly crowded world of deliveries, JOKR is leading the pack when it comes to hyper-fast delivery. Based in New York but mostly operating in Latin America and Europe, its strategy depends on well-located dark stores and delivery workers on electric motorbikes, two factors that allow deliveries in under 15 minutes.
With this combination, JOKR is seeking to become the international leader in the grocery delivery category. However, its growth playbook includes two traits that, until very recently, similar companies did not have.
The first is that JOKR has an integrated operation from product to delivery. That is, JOKR does not solve the last-mile delivery issue between big retailers and their consumers. Rather, JOKR is itself a “dark” supermarket that specializes in hyper-fast home deliveries.
The second trait is that this company hires all of its delivery workers. JOKR offers them a job with benefits in an industry where delivery workers usually work independently, as third-party contractors.
Contxto talked to Germán Peralta, CEO of JOKR for Mexico and Colombia, about this and other business decisions the company has taken to achieve its main goal: become a tech company with social and ecological responsibility.
Contxto (C): How did the company grow from a LatAm market to other continents?
Germán Peralta (GP): We officially launched in Mexico in March 2021. We chose Mexico City first due to its population density and its need to increase e-commerce penetration in supermarkets. We started with our MVP in two areas, Roma-Condesa and Polanco, and we had quite a fast traction. We learned many things from the operational point of view: how to manage the inventory, how to make the polygons so that the delivery worker arrived in the established time, what is the level of product that we have to order, and so on. This allowed us to create a blueprint for our operational rules in the rest of the countries. This is why we quickly launched in Colombia and Peru, and after 3 months we reached New York, Austria, and Poland.
C: How do the challenges of launching a hyper-local delivery service differ between Latin America and elsewhere?
GP: Actually, the challenges are very similar in terms of relationships and negotiations with brands, as well as with the behavior and needs of customers. Cities are similar when you think of them in terms of density. Although they are very different from each other, for us it comes down to the neighborhoods: we think in terms of 10 and 12km2 polygons, and that creates similarity in the different markets where we operate. We have found the greatest difference in the operating team’s structure. Latin America has a much higher unemployment rate, and the job market is highly informal. Since we offer formal working conditions and benefits, it has been easy to attract talent. The situation is not the same in the United States and Europe because workers are more protected there, so there is plenty of competition for talent.
C: Several delivery companies in Latin America have added financial services to their offering. Will JOKR walk that same path?
GP: We are not developing anything on our own, although we are working with some startups in the region for projects related to financial inclusion. We have a good relationship with our investors including Kaszek and monashees, two of the most relevant names in the region that have put us in contact with people who are doing cool things in terms of fintech, consumer goods, development of local entrepreneurs, etc. But we’re focused on groceries. There really is a lot of work behind what we do because we are not an app. We are more like a supermarket. We have to solve issues in our entire production chain so that, for example, bananas always arrive well; we are always reviewing the inventory, our warehouses, distribution centers, and delivery people. We have to concentrate on that.
C: How do you visualize JOKR’s growth in the next few months?
GP: We are now operating in three cities in Mexico, two in Colombia, three in Brazil, Lima in Pero, and Santiago in Chile. We have refrigerated meats and fish, fresh fruits and vegetables, dairy, eggs, and some products that go beyond what you usually find in a supermarket: telephone cables, hardware –even sex toys because people prefer to order them online instead of buying them in person. We are thinking of adding other types of products such as decoration and kitchen items; we will probably go towards an e-commerce offer. As our founder (Ralf Wenzel) has said, we want to be an “Amazon on steroids”.
C: Who do you consider to be your biggest competitor?
GP: In Mexico, it’s Walmart, the undisputed supermarket leader. But in Latin America, 96% of grocery purchases still happen in a physical space, so our competition is that: the world of the past. We are a native digital supermarket. There are other players who are doing a good job and together we are changing consumers’ habits. An issue that worries us is the trash generated by deliveries. It is taking us time to find a solution through our digital tools, but we are working with brands to avoid single-use plastics and promote the use of recyclable packaging. In the industry, bricks-and-mortar supermarkets will try to move towards digital because the penetration of e-commerce and digitization in Latin America jumped 5 years during 2020. Anyone who doesn’t see this opportunity will lose.
C: What is JOKR’s vision for the delivery sector?
GP: Now that tech companies in Latin America have already grown to a significant population in the region, social responsibility does matter a lot. Delivery workers need to have benefits because social security exists for a purpose. If we turn towards a collaborative world of entrepreneurs who work on multiple platforms without a pension in any of them, what will happen in 20 years on a social level? That is why we believe that you have to have sustainable jobs. In Latin America we already have more than 1,200 people in the operating team, including delivery workers and warehouse personnel. They all wear the same shirt: there are different categories of workers and they’re not ranked by their performance. They’re all part of the same team.