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The Spoon

Daily news and analysis about the food tech revolution

Cornershop

Instacart Files Lawsuit Against Uber’s Cornershop Over Grocery Listings

Today Instacart sued Cornershop, which Uber bought a majority stake in last year, alleging that Cornershop stole product images and other intellectual property.

The Information was first to report on the lawsuit, with reporter Amir Efrati tweeting out the following:

According to Bloomberg:

Instacart claimed Cornershop stole copyrighted images and modified the file names in order to conceal the alleged theft. Instacart also said Cornershop posted job listings for software engineers with “advanced scraping” and other skills indicating that taking and reusing content is part of a company-mandated effort, according to the complaint.

Instacart’s lawsuit comes on the heels of Uber announcing earlier this month that it was expanding grocery delivery into the U.S. through its Cornershop unit.

Grocery e-commerce has seen record sales over the past few months in the U.S., spurred on by the COVID-19 pandemic and subsequent lockdowns. With the coronavirus negatively impacting Uber’s ridesharing business, the company’s ability to diversify its revenues has become more important. Uber also this month announced that it was acquiring rival third-party delivery service, Postmates.

We’ll be following this story as it progresses, but its clear that Instacart, which has raised more than $2 billion in funding, will actively protect its grocery delivery turf. With the lockdowns, Instacart became an essential service for people needing food, and the company bolstered its gig-working delivery worker ranks to 750,000 to meet up with demand.

How big a threat Uber can be with its later and currently limited arrival into grocery delivery reamains to be seen, but the company does have a huge installed base and Instacart looks like it is taking no chances.

Uber Acquiring Majority Ownership of Grocery Delivery Startup Cornershop

Uber announced today that it is acquiring a majority ownership of Cornershop, an online marketplace for on-demand delivery from supermarkets across Chile, Mexico, Peru and Toronto. The deal is expected to close in 2020, and Cornershop will continue to operate with its current leadership. Cornershop has so far raised $31.7 million in funding.

Uber CEO Dara Khosrowshahi has said before that grocery delivery is an area he wants the company to get into. Grocery delivery is already a pretty crowded field here in the U.S., with Walmart, Amazon and Target all offering same-day service, not to mention startups like Instacart, DoorDash and Postmates establishing their own services. While online grocery shopping remains a tiny 6 percent of the overall grocery shopping market, in 2019 it grew 15 percent year-over-year. As delivery becomes more widely available, you can expect that number to increase.

Uber has been working to stop hemorrhaging money this year. The company reported losses of $5.2 billion during its third quarter this year and has said that profitability for Uber Eats is still far off. Last month the company merged Uber Eats into its main ridesharing app, and said it wants to become the “operating system for your everyday life.” Groceries are certainly a part of everyday life.

The Cornershop acquisition also shows how Uber is adjusting its global business. The company recently partnered with Japanese convenience store chain Lawson for food delivery, but also pulled Uber Eats out of the South Korean market facing competitive pressures in that country. The addition of Cornershop to its quiver will now obviously bolster its presence across Central and South America.

The deal still needs to close, however. We’ll see if Uber has better luck than Walmart, which tried to acquire Cornershop last year in a deal that fell apart after running into issues with Mexican regulators.

Walmart Acquires Cornershop, While Jet.com Gets in a New York State of Mind

Walmart announced yesterday that it is expanding its digital presence in Latin America with the $225 million acquisition of Cornershop, an online marketplace for on-demand delivery from supermarkets in Mexico and Chile. While that move continued the retail giant’s global spending spree, domestically, the company’s subsidiary Jet.com unveiled a revamped website featuring enhanced grocery delivery options in New York City.

Walmart’s purchase of Cornershop is the latest international acquisition for the company. In just this year Walmart has:

Rather than going head-on in its battle with rival, Amazon, Walmart seems to be going around and flanking it, shoring up e-commerce and digital resources around the world.

That’s not to say Walmart has given up its fight against Amazon here in the U.S. Yesterday also saw Walmart company Jet.com launch a revamped website with a new grocery shopping service catering specifically to New York City dwellers.

As part of its pitch to the Empire City, Jet.com is offering products from iconic local businesses there such as Bedford Cheese Shop, Orwashers Bakery and Just Bagels. Customers will also be able to purchase high-end craft beer for delivery.

The delivery itself is also getting an overhaul with next-day and three-hour schedule delivery windows for groceries and more. Delivery will be powered by Parcel, which Walmart acquired last year.

Obviously Walmart/Jet isn’t going to stop at New York City. Look for this type of local-and-fast e-commerce experience to scale out nationwide. Walmart is already putting those pieces together with the recent launch of its Spark Delivery service. Between the logistics data and experience it gets from Parcel, and the local purchase and delivery data Spark will provide, Walmart and Jet will be able to better target customers in different regions around the country.

And with its push into foreign markets, it won’t be too long before it will do it around the world.