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300% growth in Q1 of this year – Interview with Devan Hughes, founder and CEO of the grocery delivery platform Buymie

While 2020 has been a difficult year so far for many businesses, the Irish startup Buymie seems to have enjoyed the opposite fate.

Previously featured as one of our 10 online supermarkets zooming through 2020 list, the Buymie brings any grocery or household item to their user’s house, offering a same-day delivery promise. The business has gone from strength to strength over the past 18 months, with continued expansion throughout Ireland and the UK, as well as a lucrative partnership with supermarket giant Co-op.

Of course, the social distancing measures from the pandemic have also led to soaring interest in the services of Buymie. Demand has naturally increased in online deliveries, with the startup reporting an impressive 300% increase in activity over the past few months.

Fresh from the announcement of a further 5.8 million funding round, we sat down with Buymie founder Devan Hughes to discuss further expansion plans, incorporating sustainability into the business, and how the online supermarket boom can continue post-coronavirus.

Let’s start with an overview! Where did the idea for Buymie come from?

It’s been a long road for sure! My background originally was neither in tech nor grocery but rather energy – more specifically, commodity distribution and management. Buymie began as an idea in 2014 as many businesses do – over a pint in a Dublin pub. A conversation with an acquaintance led to me learning that the online grocery market was worth €9 billion in the UK and Ireland combined. Despite this, retailers were losing over €300 million a year due to aggregate losses with each retailer setting up their own vertically integrated network – effectively subsidising their own e-commerce distribution models to their own detriment.

My experiences in gas and electricity –  where distribution was managed through shared infrastructures – was completely different to the way the grocery retail business worked, and this gave me the idea for Buymie. The long term demand curve for online grocery retail was also a key deciding factor, given it was set to double to almost €22 billion by 2024.

If you apply basic free market economic thinking, when you have a rapidly expanding market with heavily compounding losses, within a relatively short time horizon, you will very likely experience either a correction or a disruption of that market in the not too distant future – given what we have seen in just the last 3 years with the $13Bn AMZ acquisition of Wholefoods, the $3bn Alibaba investment into Sun Art Retail group, and Target’s $500m acquisition of Shipt, it is safe to say we are seeing that global correction happening already.

Congratulations on the recent funding round! You’ve announced your intention to continue expanding throughout the UK. Any plans on expanding throughout the rest of Europe (and even beyond)?

Buymie’s ambition is to become the largest grocery same day delivery platform in Europe for enterprise retailers. Given we were founded and originate in Ireland and that the UK is our nearest neighbour and economic competitor, it makes sense to begin our efforts by establishing ourselves in these two markets first. With the European online grocery delivery market set to hit €56 billion within three  years, there are huge opportunities to plant our flag as the market leader – and that’s what we’re aiming to do.

You’ve also announced that you’ll be using the new funds for focusing on initiatives to reduce the environmental impact of shopping. What motivated the decision to incorporate sustainability into the business?

As with many startups, at the start of our journey our mission was about survival. In 2018 as our trajectory stabilised, sustainability and stakeholder considerations became high priorities and we began to look at specific ways of building sustainability into our business model and platform.

Our delivery model is designed to minimise environmental waste by avoiding the use of bags in the order delivery process, where our shoppers use reusable canvas insulated bags to pack customer orders. Whilst this initiative is currently on hold due to COVID and the need for contactless delivery, we are now investigating the opportunity to introduce paper bags in the future.

Our algorithm is also programmed to optimise order fulfillment in the market, for example taking private cars off the road by facilitating multiple orders at one time with one Buymie shopper. Looking to the long-term, many of the cities we plan to expand into have aggressive Co2 emissions targets, and Buymie’s aim is to plug in to these efforts. Reducing private car and fossil fuel use is a global priority, and part of our long-term planning includes supporting customers to be able to phase-out use of traditional cars in favour of a sharing-economy model, and incentivising our shoppers to use electric cars in the future.

Alongside the fundraise, Buymie recently expanded its supermarket to the UK in partnership with Coop, after partnering with Lidl Ireland. What do you think startups can learn from working with large corporations, and vice-versa?

We’ve seen both sides of the coin where relationships with corporate partners are concerned. The majority of our experiences have been positive – for example, our first stakeholder investor was Unilever with whom we’ve continued to enjoy a very productive relationship to this day. Through the partnership with Lidl, Buymie became the first independently-owned ecommerce platform to take Lidl online in Europe.

What we’ve learned in the process of our collaborations with corporate partners is that, for the relationship to work effectively, a high degree of transparency is required. In the past we’ve experienced a mismatch in expectations where timelines and milestones are concerned. Whilst in many ways large corporations are essentially “immortal” where timelines are concerned, startups are dealing with cash runaways and milestones that do not allow a high degree of flexibility.

The solution to this, as in all relationships, is communication – making sure partners are aware of vital considerations and ensuring alignment on the milestones both partners need to hit is key.

Buymie has enjoyed a boom from the onset of the coronavirus pandemic. How do you expect returning to normal will impact business?

In the past few months there’s no doubt we’ve seen the global grocery industry benefit from the increased customer demand due to coronavirus disruption.

We’ve also seen a rapid acceleration of consumers purchasing groceries online, with COVID bringing growth in the online channel forward by at least five years. We’ve grown by 300% in Q1 of this year alone, and we’re currently trading at nearly a year ahead of our business plan. Demand has continued to remain strong, with our focus now on adding capacity for new retail partnerships.

As time goes on, money will flow back to other sectors and channels – but some of the demand will stay, with grocery retail remaining inflated for at least the next 12-18 months.

Buymie isn’t your first entrepreneurial venture. What’s been your most valuable learning from scaling up companies so far?

It’s true, I’ve certainly been around the block when it comes to entrepreneurship! I’ve experienced four spectacular failures in the past, but each one has provided its own unique learning opportunity, from selling door to door, importing sporting equipment from China or tinkering with biometric payment technology.

Scaling up a business effectively relies on thinking tactically and strategically. As an entrepreneur you will face daily successes and failures, but scale is about designing and deploying effective processes. Is that solution you’re putting into place going to scale effectively in line with the objective you’re trying to achieve? What processes are you going to put in place to make that work? These are the sorts of questions you should be trying to answer with your strategic focus and tactical planning in the early days. You need to live and breathe your user experience.

On a similar note, what tips do you have for building a solid team to scale up with?

Whether you’re trying onboard your first hire, board member, investor, there is a critical need at all times to convey a powerful story to secure their buy-in to your mission. As an entrepreneur and leader, you need to tell that story in a way that’s going to connect with them, and this is most important early on in the lifetime of your startup – in the early days you want missionaries, not mercenaries.

Finally, you’re based in Dublin. Would you recommend it to other budding entrepreneurs for building their startup? What are the unique benefits and challenges of starting up in the Irish capital?

In many ways I’m fortunate to have been Dublin-based, and able to start Buymie in Ireland. Dublin is a tremendous startup capital with a rich community of entrepreneurs and talent available. Government resources such as Enterprise Ireland have been crucial in providing help to getting Buymie off the ground, whether that is providing support and access to funding, or providing guidance and partnerships to help us start, grow and innovate.

Dublin’s also a hotbed of great entrepreneurial and tech talent. With every major tech company having a headquarters here, there’s a host of great universities and educational opportunities on offer in the city too. The opportunity to access best practices from a tech and business practices perspective is invaluable, and Dublin also has a good history in building SaaS or Medtech startups too with success stories such as Stripe and Medtronic particularly notable – if you’re looking to start a business in these sectors, I highly recommend it!

That’s not to say that there aren’t challenges being based here. As Ireland is a small country, starting a consumer business here can often prove limiting given the size of the consumer market is relatively small compared to other countries. On the other hand, the grocery market is one of the few that bucks this trend. Ireland is also a great test market for the UK given the cultures and outlooks are so similar, which was a major factor for our launch in the Bristol area in June.

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Floraidh Clement
Floraidh Clement
Floraidh is a Scottish writer and social media manager, based in Berlin and working within its vibrant startup scene. Areas of interest include travel, fashion and eco tech. She’s particularly fascinated by the human side of entrepreneurship, and how startups are adapting to the rise of of conscious consumerism.

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