From Micro Communities to Micro Shopping Trends in Germany…
The immigration door in Germany that was left ajar was recently open wide for white- and blue-collar workers. According to Destatis (Federal Statistical Office of Germany), the number of labor migrants who came to Germany from non-EU countries has risen steadily since 2010. Moreover, there seems to be a sharp rise in labor migration in 2022, and the movement continues.
Does the act of immigration stop after moving to Germany, though? Whether you call them immigrants or expats, newcomers form or integrate into micro-communities, bringing a part of their culture to the country. Berlin’s tech ecosystem is rising to the need for migrants’ feeling of belonging, creating product variations catering to the needs of immigrants and expats. To investigate the niche product approach further, we interviewed Omar Halabi and Mohamad El Haj, the founders of the German/Arabic Delivery App “Yolla.”
The Development of the Quick Delivery Trend
“Grocery delivered to your home in 15 minutes.” This motto catalyzed the instant delivery trend that started during the pandemic. Instant delivery sounded like the convenience people living in bigger cities, living alone, and people with busy schedules needed. However, it didn’t take us too long to flip the coin to realize that this model was not optimal for the drivers.
The return to in-store shopping habits and the Venture Capital funding drain changed the picture. Fast forwarding to today, many instant delivery providers has given in to ruthless competition or funding drainage. Only particular examples like Getir, with a declaration to treat riders respectfully, and Flink stood out. Regardless, the real question remains: “Do we really need an avocado in fifteen minutes?”
The Founders of Yolla mention that instant delivery combines the pandemic and product positioning. “We don’t know if only VC-based demand created this trend. When we look at it from a German perspective, there has been nothing like this in Germany. But when we look at it internationally, like, say, Syria, Turkey, Lebanon, all these countries, it’s a tradition, or it’s like culturally inherited that every Bakkal delivers. When you call your local grocery shop owner and tell him what you need, he will be there quickly. The delivery might not happen within 10 minutes, and maybe it will take two hours, but he will be there first.” They, however, believe that since they educated the customer in the instant result way, all the competitors had to adjust to this value proposition.
“If Yolla is not about getting groceries immediately, what is it about?” I ask, investigating Yolla’s value proposition. “We deliver Turkish and Arabic products in a few clicks,” the Founding team answers, adding, “Instant delivery market is about convenience and simplifying the buying process. We are focusing rather on accessibility. For us, it’s not about getting it fast; it’s about getting it in the first place. As for Turks and Arabs, there is the hassle of going to several stores due to cooking and hospitality conducts.”
“Online Delivery Companies Will Not Replace In-Store Shopping”
Omar and Mo, see more and more demand for deliveries, despite the return to physical stores. When asked whether delivery providers will take the crown of physical shops at one point, Mo answers, “I think we’re so far away from replacing shops. I mean, the online penetration rate is still not at that level where you can say shops are not needed anymore. It will take some time. Going out and grocery shopping can be, for some people, still a pleasant experience. For some people talking to the butcher, they have known for years or going to a grocery store where they know the owner can be a good experience. Also, for some people, this is the experience of the week or the highlight of the week.
All in all, we are far away from replacing shops. I mean, this is also what they’ve been saying as fashion e-commerce grew a lot, right? Everyone claimed that e-commerce shops would take over in the cities, etc. And they’ve been saying this for the last 15 years, but nevertheless, the stores are still there. So, instead, we are making the cake even bigger. Going or entering the Turkish market for German guys is a little intimidating right now. It would help if you had familiarity. But once they use Yolla and get over the anxiety of experiencing something new, they will make the step to go into the Turkish store. So, this market can be as big as 25 billion in Germany; it’s not at its peak yet. So, it will grow bigger as we make it more accessible to micro and macro communities.”
Regardless, Yolla’s Founders think that in-store shopping should evolve and improve for resilience. As we have experienced the once-a-retail behemoth Galleria Kaufhof downscaling, there is a risk for all out there. Therefore, retailers must improve and change, addressing trends and current needs, if they want to stay relevant.
“Our Goal is to Establish a Nationwide Brand”
During the interview, I couldn’t help but notice the name of Omar and Mo’s start-up, and they confirmed my initial thoughts; the name is inspired by the famous Tarkan song “Yolla.” Apparently, the founding team settled on “Yolla” almost immediately as the word fits sound and meaning-wise.
Omar and Mo believe in an untapped potential in the Arabic and Turkish delivery niche, especially outside of Berlin. Indeed, Berlin eases access for micro-communities due to the diverse range of stores and artisans available throughout the city. However, Berlin doesn’t create a realistic representation of the German market, as access to ethnic products in other cities and towns is much more limited. Therefore, the team wants to reach all parts of Germany and establish a national brand.
Differences Between German and Non-German Shopping Behaviors
For me, “How does the shopping experience of Turks and Arabs differ from Germans,” is the real question.
Mo explains: “For us, you need to tap into several stores to fulfill your bi-weekly or monthly grocery needs. You usually start in a Turkish store and then continue with an Arabic store for your weekly shopping. And then, sometimes, a butcher if there is no butcher in the Turkish or Arabic store. Later, you move on to a chain like an Aldi or Discounter for more mainstream needs. So, the shopping experience is completely different and a bigger hassle. Then there is the user experience issue, as there are not enough payment options in the artisan markets, excluding credit cards and contactless. Sometimes there is only cash payment, which is tricky for bigger shopping baskets. Last but not least, if you are not living in the micro-community zone, you must bring the bags to your home, which can be tricky depending on where you live. This whole experience is what we’re trying to improve, basically.”
Omar also has a valid point, talking about a difference all Turks can relate to: “Even the amounts we buy are different. We don’t just buy 500 grams of meat; we buy two kilos. We like cooking for bigger parties and keeping a pantry at home. For that, you need more economic shopping options, but that’s impossible in chain markets. In Aldi, you don’t find five-kilo bags of rice, but in Turkish, you find it. That’s because the buying behavior difference differentiates Turkish markets from many different aspects.”
It All Narrows Down to Culture
Understanding how the system in Germany works is one of the biggest challenges expat entrepreneurs will need to overcome. Omar explains further: “In Germany, you can’t do anything `just because.` Every action or reaction needs to be triggered by a reason. You can’t use a pillar in construction just because it’s beautiful; it has to fulfill a purpose. That’s very different for us as Arabs. We do stuff because it is nice or because we enjoy it. We go to the coffee place at 11 in the morning because we enjoy hanging out, and we buy hummus in bulk because it is discounted, not because we need it.”
However, according to Mo and Omar, immigrants and expats influence how Germans decide and behave, and the wheel continues to spin. For example, there is a massive culinary influence from Turks and Arabs in Germany. Preparing homemade falafel or kebab could have been considered too exotic or cumbersome back in the day. Still, as the cultures mix and the access to ingredients improve, the attitude changes slowly. Therefore, Mo and Omar believe immigrant entrepreneurs are cultural missionaries bridging cultures rather than mere business owners.
Omar and Mo are currently taking part in Earlybird’s Vision Lab program and are fundraising. You can contact Omar and Mo to learn more about Yolla or to exchange ideas.
