Uber is at the forefront of acquiring a grocery delivery company – Cornershop. It is taking advantage of Walmart Inc (NYSE:WMT)’s loss because the latter is facing regulatory hurdles in Mexico to acquire Cornershop. Uber might have paid over $225 million to take over Cornershop because Walmart offered more than $225 million, but failed to win because of regulatory hurdles. The regulators feared that the takeover of Cornershop by Walmart, which is a large box chain, would benefit from unfair benefits over CostCo.
However, the acquisition of Cornershop is cheaper when compared to DoorDash, which is more expensive and does not conduct operations in Peru. Uber intends to supplement its Uber Eats with the delivery of groceries.
Dara khosrowshahi, Chief Executive Officer of Uber, said the company is pleased to enter a pact with Cornershop that helps to deliver groceries to several customers using its platform. The company is currently facing regulatory hurdles for its ride service business and plans to reframe itself through this takeover.
The takeover helps Uber to derive profits apart from its ride-sharing business. Its share price has declined by 30% since the IPO, and the company is searching for ways for turnaround. Banco Ve Por Mass’s analyst said Uber uses the presence of Cornershop to improve its e-commerce footprint, just like Walmart. Therefore, the customers of Uber can get food from prominent restaurants and groceries from wholesale giants at reduced rates. Uber charges a small delivery fee for the service.
Cornershop delivers groceries
Cornershop fulfills the orders of groceries when the customers place an order through the app. It matches the orders to the personal shoppers and delivers to the doorstep in an hour. Cornershop collects groceries from a store such as Walmart, Petco Holdings Inc., Costco Wholesale Corp., pharmacies, and bakeries to fulfill the orders. The company also operates in Canada and Peru.
Competitors to Cornershop include Postmates inc., and DoorDash Inc., which are trying to deliver the groceries to the homes of consumers. Postmates entered a pact with Walgreens Boots Alliance Inc to deliver the consumable goods from drug store chain owned New York City stores. DoorDash began a deal in August Mercato Inc., an e-commerce platform, for the same day deliveries to the customers from over 750 independent grocers.