When the Brazilian retail giant GPA announced the acquisition of the delivery app James Delivery, at the end of 2018, no one, not even the retailer, could ever dream about the new reality coming a year and a half later. But it was precisely amid the Covid-19 pandemic that James Delivery saw orders skyrocket. 

“We started to feel the effects of the pandemic in the second half of March. The second quarter was when we realized this demand,” says the startup CEO and cofounder, Lucas Ceschin, in an interview with LABS. James Delivery and the other business units of GPA reported financial results for the second quarter this Thursday. The superapp took a leap of 1200% in sales in gross merchandise volume. In the retail category, growth in the period reached more than 3000% in sales and 1800% in the number of orders.

“This growth is sustained by an increasing customer adherence to the platform and reinforced by structuring initiatives such as the successful launch of the new subscription platform ‘James Prime’,” GPA explains in a memo. The app, which increased its footprint from 18 to 25 Brazilian cities, also expanded operations from 50 stores, before the start of the pandemic, to 323. If fast growth came earlier, so did challenges. 

“We multiplied the number of stores served in a short time. The first thing was to really calibrate the operation,” recalls Ceschin. “Bringing in the right number of delivery partners, stores, the right assortment of products, that was certainly our biggest challenge.”

Consumer habits brought by social distancing and social isolation measures have impacted online sales in Brazil since the beginning of the pandemic. But it was during the month of May that the numbers reached the highest level. According to data from the market intelligence company Compre & Confie, online retail reached a record BRL 33 billion in revenues between April and June, the highest figure in the historical series of the survey by quarter. Compared to the same period in 2019, the number means a 104.2% rise.

The delivery category followed the same pace. In a survey published in June, the consultancy firm CVA Solutions found that spending on meal delivery after the start of the pandemic increased to almost 46% of respondents, with average monthly spending reaching BRL 225.00. In addition, 42% of consumers placed more orders for meals and the category added 5% more new customers. 

“Digital delivery is more than a courier. It’s not just logistics, it’s intelligence as well. It adds convenience and will become a habit in people’s lives,” predicts Sandro Cimatti, managing partner of CVA Solutions and head of the research. The study, which measured the preferences of Brazilian consumers regarding delivery brands, also revealed that James Delivery reached the best perceived value, indicative that assess cost-benefit verified by consumers, with an index of 1.10. Uber Eats and iFood placed next in the ranking.

Greater demand and competition, same strategy. “Our competitive edge remains the same as a year and a half ago (when the app was acquired by the group) and now it begins to reveal its strength,” points out Ceschin. “We have over a thousand stores throughout Brazil and we collect a good part of them, there is still a large park to increase and we are not close to saturation. But using the stores as distribution hubs is something that makes James very different from all players, both in our industry and in others.”

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The executive says that the strong capillarity of GPA stores, the notoriety of the group’s brands and complete operational and systemic integration, bring James a unique asset in the face of the competition. “It will become more clear to the market how we translate this integration into better customer experience, greater speed, better price, less inventory divergence,” he says. “All of these things that count so much for retail start to make more sense and now our strategy is becoming increasingly clear and noticeable to the customer.”

“James got a good rating of cost-benefit and stands out positively on attributes such as delivery rate and discount coupon (promotions),” explains CVA Solutions’ head of research.” The application is also highly rated by its ease of use.”

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The ease of use added to consumer’s needs amid isolation measures seem to be the reason behind another data shared by Ceschin: between January and June, the percentage of people over 60 years using the app, doubled. “Now there is already a mass adoption. We are leaving the first phase of the people who test, who are willing to have a more experimental product. In our case, our base matured.”

Supported by solid growth, the startup needed to review its business model at the beginning of the second quarter.” We imagined that the demand would be one and it ended up exceeding our own expectations,” says the executive. With operations in 25 cities, 13 states and the Federal District in Brazil, the app intends to continue growing to other cities in the second half of the year. “We will certainly increase the number of couriers, customers, and increasingly bring the consumer experience as a primary focus.”

Expanding the number of couriers, however, can be more of a challenge for the startup. With acts in several Brazilian cities, the first delivery strike, which took place on July 1, caused delays in delivery orders and reduced the number of workers accepting orders on platforms. 

The movement, which had its second stoppage last Saturday, July 24, asks for better working conditions for those who act as delivery partners on platforms like James. “They have every legitimacy and right to make claims,” ​​Ceschin ponders. “We are giving more openness to listen and understand their demands and how we can improve our initiatives.” In April, the platform launched the action double tipping for self-employed couriers. The application pays the delivery person the same amount that the customer decides to send as a tip during an order.

Another hurdle, already mentioned by the executive in a previous interview with LABS, is fresh products. “It is still a barrier. It is much easier to deliver a cleaning item than lettuce, for example,” says Ceschin. “But this very adoption by customers has also made it possible for us to build an increasingly faster platform. Today, perishables already have a much larger share than they had at the beginning of the year,” he reveals. “When the consumer understands that can also buy fresh products and receive with quality, it is one of the things that change the habit.”

Although there is a reduction in demand for delivery as cities resume activities, the superapp cofounder believes that the change in habit is here to stay. “People want to go back to consuming, leaving home. Often going to the supermarket is the very walk of the week,” he ponders. “What happens now is that they know they can go to the supermarket or not.” 

An 1800% push in orders and a jump of more than 3000% in sales are some of the results achieved by James in Q2. Whether what’s next is the new normal or a return to normality; for the superapp, the future seems to be one of growth.