Acquisition of Alcohol Delivery Service Startup Drizzly
Plans to Integrate into UberEats App Announced
[Asia Economy Reporter Kwon Jae-hee] Uber Technologies (Uber) is expanding its business from food delivery services to alcohol delivery. This move aims to strengthen the portfolio of its food delivery division, which has become a new core business after the ride-sharing sector was hit hard by the COVID-19 pandemic.
According to the Wall Street Journal (WSJ) on the 2nd (local time), Uber announced that it will acquire Drizly, an alcohol delivery startup, for $1.1 billion (approximately 1.23 trillion KRW). This is reported to be the largest deal in the U.S. online alcohol industry.
Drizly, founded in 2012, is a specialized alcohol delivery startup that offers a variety of alcoholic beverages, from craft beer to wine, delivered directly to customers' doors in cities including Los Angeles, Boston, New York, and Chicago.
The WSJ evaluated that "Uber has revealed its ambition to offer a wider range of product categories through the acquisition of Drizly."
While Uber’s core ride-sharing service was severely impacted by the COVID-19 pandemic, its food delivery service, Uber Eats, benefited from the pandemic, prompting the company to accelerate the restructuring of its business portfolio centered around this service.
In fact, last year Uber acquired Postmates, a competitor of Uber Eats, for $2.65 billion, making it the second-largest player in the food delivery market after DoorDash. Additionally, Uber acquired Chilean grocery delivery startup Cornershop and began grocery delivery services in the U.S. and Canada starting last year.
The acquisition of Drizly is part of Uber’s strategy to expand its business related to food delivery in a similar vein.
The significant growth of the U.S. online alcohol market due to the COVID-19 pandemic is also cited as a background for this acquisition. According to alcohol consumption tracking firm IWSR, e-commerce accounted for only 1% of U.S. alcohol sales in 2019 but is expected to grow to 7% by 2024. Especially, online alcohol sales in the U.S. grew by 80% year-over-year last year due to the pandemic. The U.S. is projected to surpass China, the world’s largest online alcohol market, within this year.
Uber stated, "We plan to integrate Drizly into the Uber Eats app in the future."
Meanwhile, the acquisition is expected to be completed within the first half of this year.
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