GidaExpress: Grocery Delivery in Turkey

Abstract

This fictional, international case explores online delivery models through the voices of two female protagonists: Melis Aydin, COO, who is from Turkey; and Athena Galini, CEO, who is from Greece. They have recently begun an online grocery-delivery (OGD) service called GidaExpress (i.e., Express Food) by closing on a TRY300,000 low-interest loan and entering a start-up incubator in Istanbul, Turkey. Aydin and Galani are evaluating three models for hiring drivers—all full-time employees who can be trained (and perhaps provide more consistent and higher-quality customer service); all independent workers who are paid a wage rate that escalates in order to meet demand; or a hybrid of the two. This story allows for a discussion of the strategic trade-offs between investing in a full-time workforce and sourcing independent workers of unknown quality using a fluctuating wage rate, and how these decisions impact the ability of the business to deliver on the value proposition. Excerpt UVA-OM-1635 Dec. 3, 2019 GidaExpress: Grocery Delivery in Turkey You Can't Spend It Twice Melis Aydin, COO, and Athena Galini, CEO, sat together in their new conference room in a start-up incubator in Istanbul, Turkey. The two women had just finalized a TRY300,000 low-interest loan through a program offered in a partnership between the Turkish government and the European Bank for Reconstruction and Development (EBRD) to start their new business, GidaExpress. GidaExpress, roughly translated as express food, would be an online grocery-delivery (OGD) service. The business model for GidaExpress was similar to that of US-based InstaCart, in which users placed orders online, available drivers who were also professional shoppers accepted the orders, and then those same drivers performed the shopping and delivered groceries to the customers. Several years prior, Yemeksepeti, a Turkish food-delivery service, had been acquired by Delivery Hero for USD589million, and GidaExpress's founders were enthusiastically hoping to duplicate this success in the OGD market. Aydin, who was from Turkey, and Galani, who was from Greece, had met while studying accounting at the London School of Economics. Aydin had then gone on to earn her MBA at the Darden School of Business at the University of Virginia, while Galani had earned hers at the University College Dublin School of Business. They planned to purchase a basic but functional software platform from another former classmate to meet their needs, but also would require some additional investment to modify for the Turkish market. The friends were now building their first venture together on a sweat-equity basis, and had recently experienced the first serious disagreement of their partnership. They had only TRY150,000 budgeted for payments to drivers, and, while both of them wanted to stretch these funds as far as possible, they had very different ideas on how to accomplish this. (See Table 1 for the initial company budget.) Once that money was spent, if their fledgling venture wasn't pulling in enough money to support their other business functions, they would run out of money. . . .