Teo Širola: We want to expand into medicine delivery, but the regulation has been pending since 2016.

From the Spanish 'unicorn' recognizable by its yellow backpacks and the promise to deliver anything you desire quickly, news of significant changes in the company has been arriving frequently lately. Glovo sold its business in Latin America last year, secured a new funding round worth 450 million euros this year, and made a series of acquisitions to expand into the Southeast European market. What are Glovo’s plans for the Croatian market, what has been done with Pauza.hr, which it recently acquired, and how do technological platforms plan to respond to the increasing demands for regulating work in the so-called gig economy? We spoke with Teo Širola, the General Director of Glovo for Croatia.

Recently, Glovo acquired the Foodpanda brand in Romania and Bulgaria, Donesi in Bosnia and Herzegovina and Serbia, and Pauza in Croatia. What does this mean for Glovo in Croatia, and is the process of merging Pauza in Croatia complete?

– Glovo has taken over Delivery Hero’s operations across the region. The merger process is still ongoing and does not proceed at the same pace in all countries. For example, in Romania, we first need to obtain regulatory approval for that acquisition. We have made the most progress in this process in Croatia. We have completed a significant part of that transaction and expect to finalize it in September.

Will Pauza assimilate with Glovo, will it cease to exist?

– Pauza actually halted its operations at the end of June. From July 1, orders can no longer be placed through that application. Even now, when you enter the Pauza.hr application or website, you will automatically be redirected to Glovo. We expect that by the end of September, all or the vast majority of Pauza’s users, who have not yet learned that we have acquired Pauza, will attempt to place an order and switch to Glovo.

The restaurants that were on Pauza have, I assume, already switched to Glovo. Or part of them.

– There were many restaurants that worked with both. So existing restaurants continued to work with us, while others switched to Glovo. Not all, but the vast majority.

Glovo has taken over companies in the Eastern European market from Delivery Hero, while on the other hand, Delivery Hero has purchased companies in Latin America from Glovo. From this, one might get the impression that geographical territories are being divided among companies engaged in food delivery, meaning there is little room for many players in the markets, especially in small markets like Croatia. On the other hand, Bolt Food has arrived in Croatia. Is there room in the food delivery market for all players present in Croatia?

– People have asked multiple times whether we have made an agreement with Delivery Hero. Regarding the acquisitions you mentioned, I must say they are not connected, and there is a significant time gap between the sale of Glovo’s operations in America and the acquisition in Eastern Europe. Additionally, Glovo sold its operations in America through an open tender. We had offers from other local players, but Delivery Hero simply provided the best conditions for the acquisition. The same was true for its operations here. As for Bolt, it entered as the fourth player in food delivery in the Croatian market. I believe that the decision was greatly influenced by the corona crisis, which significantly harmed its taxi business. Due to the pandemic, it had many fewer rides, while, on the other hand, the food and grocery delivery business flourished during that period because people simply did not go anywhere but ordered from home. It was actually a logical response to the corona crisis to diversify the business in that way.

How many partners/restaurants and stores are you currently collaborating with, and how much room is there for growth?

– Today we have over a thousand partners. As we expand into new cities, we gain new local partners, while we also have national partners like dm or Ina, which are present throughout Croatia. There are always areas we can still cover. There are many new things we are working on – besides new cities, we plan to launch some new services that Glovo already has in some markets in a few months. For now, I cannot say exactly what they are. In the core business with restaurants, there is still room to introduce some new partners. Regarding stores, although we have quite a few large partners there as well, we have just started in that segment, and there is a lot of room for growth; we can have a much broader spectrum. There is a whole range of products we can expand into, but one is particularly interesting for users, especially during the COVID-19 pandemic. It is the delivery from pharmacies. We deliver over-the-counter assortments from pharmacies in other countries, but due to incomplete regulations in Croatia, we cannot do that yet.

Why is that not possible here?

– This is a complex topic, but in principle, Croatia has provided for the possibility of selling medicines at a distance as part of the Medicines Act; however, a regulation has never been adopted that would specify how this is implemented in practice. That regulation entered public consultation back in 2016, but it has never been completed.

Read the entire interview with the General Director of Glovo for Croatia in the printed or digital edition of the business weekly Lider.

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