Rappi, a one-year-old startup based in Colombia, focuses their on-demand delivery service. What do they deliver? Everything from delivering meals, groceries, and some crazy examples if you continue reading. It is betting that it can beat the odds and become a lucrative business. According to Simon Borrero, the company’s co-founder and CEO, Latin America’s market is better suited for on-demand delivery services than the U.S, “The on-demand economy, we feel, is meant to be in emerging markets”.
A growing middle and upper class is warming up on the the idea of having their meals and groceries delivered to them. You’ll see representative of Rappi everywhere you go (wearing a jacket and carrying a big box.
Rappi’s popularity might have Domicilio’s stop their Market delivery service. Since couple weeks ago “Mercado” option was nowhere to be found on their app.
How People in Medellin Use Rappi Services
Rappi’s founders realized they had an opportunity to grow beyond delivering dinner and other basic shopping items when customers started to use the service to have their income tax payments delivered to banks. Yes, customers trusted Rappi with their tax documents and hundreds or even thousands of dollars they need to pay at the bank.
Customers also use Rappi to get their Starbucks coffee delivered. Typical deliver cost is about 3,000 to 5,000 pesos while Starbucks drinks can cost 5,000-15,000 pesos. Last month, for example, Rappi delivered 100,000 Coca-Cola bottles.
Customers who have credit cards pay for the amount they want via Rappi’s app, and the courier brings them the cash. Cash withdrawals now make up about 5% of the company’s gross merchandise volume, according to Borrero.
While there are plenty of ATMs in Colombia, where five of the cities Rappi currently serves are located, it’s not always safe to venture out to use them—especially late at night, he explains. So instead, customers request up to 400,000 Colombian pesos.
You can use either cash or debit/credit card for your transaction.
Rappi, isn’t profitable just yet, their app recently had a makeover, and has about 80,000 monthly users in Colombia, where five of its six markets are located. It completes about 8,700 deliveries daily in total across all cities.