CANADA - Instacart’s delivery is looking to take on a new frontier, hoping to enter the Canadian market via a possible partnership with Loblaw. The undertaking could be a big move for both sides, with Instacart having grown slowly in the States before venturing international, and Loblaw being equally vigilant about expanding its online presence.
The Wall Street Journal reports that this is the closest Instacart has ever come to venturing over the Canadian/U.S. border, though the company has been looking to do so for a few years. Amazon’s sudden steps into brick and mortar via its Whole Foods acquisition spurred Instacart to follow through on its plans, according to the news source.
“With all the leading retailers expanding their e-commerce offers, fees could become an important differentiator as they start to overlap with each other,” said Stewart Samuel, Program Director at analyst firm IGD Canada, on the deal.
Instacart offers savings to partners in relying on existing grocers’ inventory and infrastructure, as opposed to housing its own operations like Amazon. Its entry into the country could shake-up the online marketplace, according to the source, especially as the country’s online market is relatively smaller than others.
Even so, WSJ reported last month that Amazon plans to roll out its one- and two-hour Prime Now membership delivery service into Canada later this year amongst other online delivery proposals in the country, giving the entering company a fair amount of competition to come into.
Profitero Inc., an e-commerce analysis firm, estimates that the country’s online market will be worth about 3% of C$120 billion sales by next year, while online grocery currently accounts for less than 5% of the U.S.’s nearly $800 billion in food and beverage sales.
If the Instacart/Loblaw deal goes through, the service would launch in the coming months, according to people close to the matter. Instacart’s territory would cover Toronto initially before expanding nationally throughout the grocer chain over the next year, according to a source.
Loblaw currently offers a grocery pickup service at more than 100 stores across the country with the possibility of more home delivery experimentation in the near future. It operates more than 2,400 locations, ranging from discount and supermarket groceries to pharmacies, throughout the Canadian market.
