JOKR’s Online Grocery Experience Is Catching OnBy Sofía Hanna | Mon, 01/03/2022 - 11:09
Q: JOKR became a unicorn in just eight months of operation. What is next?
A: We have grown very quickly. The priority was to raise capital to focus on markets where we are doing well and where we know that users want more. JOKR has already covered most of Mexico City but we are still absent from some areas. The opportunity for growth in Latin America is huge. Mexico has around 16 cities where we could operate conveniently, Colombia has six markets, Brazil has 20, Peru and Chile have one or two markets and Argentina has around four. This is why we need funds to invest in facilities, motorcycles and people. Our delivery people are formally employed. It is not a collaborative economy; we actually hire people and this requires investment.
Q: How does JOKR maintain its high user retention and what new strategies will the company implement to increase it?
A: Over 50 percent of our new consumers return, which is a very good figure. Special offers and discounts keep you relevant for the client. In the mass consumption business, people have many options to choose from. The idea is not only to attract consumers but to have them return and remain active. We do a great deal of collaboration with brands that want to boost their product awareness. They sell these products to us at a very low cost or even give them free. In exchange, we massify their product.
A personalized user experience is also key. Users are digital and unique. In January, we will launch a new platform that is highly personalized. It will show users' recommendations according to their buying habits. User experience must not be standard for everyone, it varies according to age, sex, habits and socioeconomic level. Additionally, on the operational side, data shows us what we need to stock at the store. The warehouse in Coyoacan could look very different from that in Santa Fe due to user preferences in every neighborhood. We know all this thanks to data.
Q: Considering the growth of delivery applications, who is JOKR’s real competitor?
A: In the grocery sector, less than 5 percent of sales are done online. In reality, JOKR is not competing against other platforms. Our goal is to change people’s habit of personally going to the supermarket. That is our real competition. We deliver products in 15 minutes because we know the importance of time; people are always busy. In the fresh-produce category, more than 30 percent of purchased produce is wasted. JOKR gives users the opportunity to change their planned purchases. Our prices are the same as those at supermarkets and we do not charge for delivery. Users order their products on our platform and save a considerable amount of time.
Q: JOKR offers similar prices to those offered by traditional supermarkets. How does the company make a profit?
A: To operate, supermarkets need cashiers, cleaning staff, additional staff to guide you through the store and security personnel. Additionally, supermarkets usually have expensive facilities because they tend to be on main roads, with good access and big parking lots.
JOKR needs a much smaller space because there are no people transiting in the store. We do not need guidance staff or security staff. Warehouses also tend to be in inexpensive locations, since we do not need to be easy-to-access for the public. All these costs that we do not need to pay, are transferred to paying our employees, including delivery people. Our business model is similar to a supermarket: we buy a product and then sell it with a profit margin. It is an efficient business model in terms of costs and more comfortable for users. For instance, in Mexico City, we are 8 to 10 minutes away from any user in the vast areas where we are already operating at full capacity.
Q: What challenges and opportunities does Latin America present compared with other regions across the world?
A: As with every disruptive technology, there are always early adopters and those who take much longer to adopt new technologies. We are certain that the entire Latin American population will not buy online but we do believe that the fraction of those people who already buy online will grow substantially. In China, over 25 percent of supermarket purchases are done online. In the US, online supermarket sales represent 10 percent of the total market. In Latin America, this sector covers less than 5 percent of total sales. The supermarket business is enormous across the world because we are all daily consumers. Certainly, not everyone will migrate to digitality but the market is certainly transitioning to digitality.
Q: What are the main challenges in the digitalization of sales in the food and beverage business?
A: Fresh produce remains the most difficult part. When people buy an avocado, for instance, they want to touch it. Customers already know what to expect from packaged products; however, fresh products are still the most profitable and we are trying different innovations to solve this issue. One solution we have discussed is giving customers the possibility to indicate how ripe they want their fresh produce to be. While technologically this solution is easy, operationally, it becomes very difficult. We will continue to evaluate possible solutions for fresh produce.
Q: What role does social responsibility play within JOKR?
A: The number of people working in tech-related businesses is growing globally. JOKR generates formal jobs, which is key for the people and countries we operate in, including Mexico. Delivery people are susceptible to accidents. The fact that our workers have social security, or IMSS in Mexico, is very important. People working in the collaborative economy sometimes forget about the importance of social security. JOKR is pro-regulation in this regard. You can see delivery people from different applications in every corner in Mexico City, and these people do not have access to healthcare, Infonavit or paid vacations. This topic should be addressed more frequently in the tech environment.
JOKR is an instant delivery application, which delivers groceries within 15 minutes. After just eight months of operation, the company became a unicorn. JOKR splits its market into three regions: Latin America, including Mexico, the US and Brazil.