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So the question should now be, do they have a sustainable competitive advantage, or are these high profit margins vulnerable to being competed away?
by Frqy3 11y ago
So the question should now be, do they have a sustainable competitive advantage, or are these high profit margins vulnerable to being competed away?
- jon-wood 11y agoThe only real advantage they have at the moment is momentum, and lots of VC money allowing them to survive much higher customer acquisition costs than otherwise. Otherwise, they're a specialised variant of online grocery ordering, which at least in the UK is a huge and very competitive market. They even have the advantage of being able to mail orders, because they're not trying to deliver anything frozen, so logistics is essentially just a case of negotiating a decent rate with a courier. I'd be really surprised not to see quite a few companies pop up in the same sector, there are already a couple I know of, possibly targeting particular niches such as oriental food.