Yandex, The Russian Google, Has 15-Minute Grocery Delivery

Russia’s biggest technology firm, Yandex NV, launched an online service that uses bike couriers to bring groceries to Moscow residents in 15 minutes, Bloomberg reported on Tuesday (Jan. 27).

The free service, called Lavka, stocks roughly 2,000 items and plans to operate as a digital convenience market for items like toothpaste and condoms.

Yandex launched 20 years ago as a search engine Google with a variety of online services, including ride-hailing and restaurant deliveries. Sales are in excess of 127 billion rubles ($2 billion). Although Russia has several grocery delivery firms, fast delivery is new territory.

“We saw that retailers themselves are too slow to deliver, while delivery startups that work with third-party stores don’t have real-time access to their assortment and often have to replace goods in the order,” Maxim Firsov, head of the division that includes Lavka, told Bloomberg. “Therefore, we focused on developing our own mini-warehouses with super-fast delivery.”

Yandex started delivering groceries last year. The demand for the service is anticipated to accelerate about fivefold to 200 billion rubles by 2023, according to the researcher INFOLine. The biggest rivals to Yandex in the supermarket delivery space are Utkonos and Perekrestok.ru.

In the beginning, Yandex got its grocery items from the retailer Metro AG. By the end of 2019, the tech firm had 50 warehouses of its own with goals of delivering to all of Moscow. It expects to have 200 warehouses by the end of this year and expand delivery to include to St. Petersburg.

Each warehouse is about 150 square meters (1,600 square feet) and serves people within a mile radius. Comparatively, the online grocery store Perekrestok.ru offers groceries delivered by truck in Moscow and has distribution spaces ranging from 4,000 to 18,000 square meters.

Yandex hasn’t been profitable yet with grocery delivery, but it expects that to change as people get used to the service and word spreads, Firsov said.

The tech firm started delivering off-menu restaurant dishes in May by making meal kits with ingredients the customer requests. It then sends the kits to a local restaurant for preparation and when finished, Yandex delivers it.