Rapid delivery start-up Zapp has said it is doubling down on London in its expansion plans.
The app plans to differentiate from rivals by focusing on the capital, instead of smaller cities, Zapp’s vice president of strategy, Steve O’Hear told CityA.M.
With a focus on a “need it, want it now,” market, the app’s approach “to place bigger bets on ‘convenience mega cities’,” he said.
“We’re investing our capital into fewer locations in a more concentrated way in markets where we think there’s a huge demand for convenience,” O’Hear explained.
London is one of the core markets where the app is honing a target market of individuals requiring “spontaneity and urgency”, O’Hear said, with around two dozen London ‘Zappstores’.
“It’s for last minute socialising, when friends and family pop round or when plans change and people need an item or over-counter medicine. That’s our sweet spot.”
Keen to not just be regarded as a delivery app for shops, Zapp has big ambitions to build its own self-reliant supply chain. Investment into this goal has included a London distribution centre in recent months, to achieve same day replenishment.
Although the pandemic further accelerated online delivery services, Zapp bosses are also clear that the app is not a flash in the pan.
“We were never really built to be a solution for lockdown, on demand convenience is all about living in the moment and having the ability to live in the moment.
“Since lockdowns and restrictions eased, we have continued to grow and grow even faster. When people are back to their busier and less structured lives, [that is when] on demand convenience really has its moments.”
The on-demand grocery category has grown rapidly over the past few years, with cash now flooding into the space as investors bet on the sector’s growth. One big player, Getir, was recently valued at $11bn (£8.3bn).
“There’s been a lot of capital invested in this space and if you get the model right, with the right ingredients, it can absolutely be a huge and very profitable business,” Zapp’s O’Hear said.
A recipe for an ultra-fast success includes serving the right-use base of a ‘need it now’ market, selling products with the right margins and a hefty average basket, as well as building a self-reliant supply chain infrastructure, O’Hear said.