Can this fantastically quick Russian delivery service replace grocery stores?

According to InfoLine, by 2023 annual online food sales in Russia are set to total 200 billion rubles ($3.2 billion). Russian Internet company Yandex launched Yandex.Lavka only in August 2019, yet the food delivery service has already taken the market by storm. We investigate whether it lives up to the hype.

Dark store and big choice

Point of the product delivery service. Yandex.Food on the territory of the first food Mall "Depot Moscow"

Maxim Blinov/Sputnik

As of early February 2020, Yandex has around 60 "dark stores" (online only) in Moscow covering roughly 150 square meters. Each stocks 1,500-2,000 different products per consumer. For example, besides the usual pasteurized milk, each Yandex dark store offers several other varieties, including soy, oat, skimmed, and coconut. Ready-made food from partner restaurants is also available, plus grocery sets with recipes for self-cooking.

What's more, each store has its own small kitchen that can prepare hot dishes from the same ingredients at no extra charge.

Besides conventional products, customers can also order washing powder, hygiene products, animal foodstuffs, batteries, and even power strips.

Delivery by bicycle

Russia. Moscow. Courier service " Yandex.Food" on a Bicycle in the Park near the Rostock aqueduct.

Gabriel Grigorov/TASS

Each store has collectors who take the order and have no more than 3-4 minutes to fulfill it. When the order is ready, a courier arrives, picks it up, and delivers it to the destination address by bicycle; all products are carried in craft bags.

The delivery radius from each warehouse is 1.5-2 km — or no more than 10 minutes by bicycle, ensuring delivery in 15 should there be a delay on the way. The stores do not have their own couriers. Products are delivered by couriers employed by the Internet giant’s related takeaway service, Yandex.Food.

Delivery is completely free of charge; however, at times of high demand, a minimum order amount of 100-300 rubles ($1.58-4.75) may be required.

The average check is 600-1,000 rubles ($9.50-15.83). According to Yandex, the most frequently ordered goods are drinking water (5 and 1.5 liters), eggs, milk, bananas, and lemons.

Our experience

Courier of the food delivery service " Yandex.Food" in Moscow.

Yevgeny Biyatov/Sputnik

I try to order a croissant with salmon for 119 rubles ($1.88) (the price at the nearest cafe is around 200 rubles ($3.17)), and immediately encounter a problem — there is no store near my workplace (central Moscow), so delivery is not possible. In its defense, Yandex promises to open about 200 more stores in Moscow by end 2020, as well as to introduce the service in St Petersburg. Next, I order the same croissant for my mother to her less central workplace. The time is 3.03pm. Notifications about each stage of delivery soon start pinging on my phone.

Packaging and transfer to the courier takes about 2 minutes. For the next 10, my eyes are glued to the app as the courier journeys to the office. Then suddenly, without delivering the order, they make a sharp turn and hurtle back to the store. My watch says 3:25pm. The longed-for croissant has disappeared off the radar.

I call the courier:

“I couldn’t find you, so I went back. There are still loads of orders at this address, I’ll be there again soon.”

The well-traveled croissant finally clocks in at 3:34pm — 31 minutes after the order was placed, more than twice the “guaranteed” 15.

“We’ll check what went wrong,” the store says. Later I’m informed that the courier had to wait 10 minutes for the customer to appear.

“It's a very rare occurrence — the percentage of delays and percentage of cancellations because the customer cannot be contacted is extremely low,” the company adds.

A rival to the refrigerator

Grocery delivery service on the house "Yandex.Lavka" in Moscow.

Anton Belitsky/TASS

The appearance of Yandex.Lavka and similar services marks an important shift in the market. Consumers are starting to make purchases more impulsively, according to Yandex.

“These days, people are less inclined to spend time in hypermarkets, stocking up for the week ahead. Figuratively speaking, Yandex.Lavka is competing more with the home refrigerator than with any particular retail format,” says Elena Novikova, head of the Yandex.Lavka press service.

In the words of Novikova, the service exists to satisfy users’ needs in the here and now, supplying fresh products on tap.

Liya Levinbuk, vice-president of the Russian Association of Internet Trading Companies, says that the share of online product sales in Russia is set to increase year on year, but will not threaten ordinary offline stores.

“Bricks-and-mortar stores will never close down. Their locations and floor space may change, but in any case there will be more of them,” she assures.

“Don’t hold your breath for a mass closure of stores over the next 10 years,” agrees Andrei Karpov, chairman of the Russian Association of Retail Market Experts, Chairman of the Board: “Sure, you can hypothesize that someday offline stores will disappear, but I don’t see it happening in our lifetime. A certain proportion of food will be bought online, but I doubt it will exceed 50% in the foreseeable future.”

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