GLOVO CUSTOMER SERVICE MARKET RESEARCH

1. SUMMARY

Glovo is an enterprise dedicated to the purchase, pick-up and delivery of products or orders to
customers who don’t want to do it by themselves. These orders have the rule of not taking more
than an hour since the moment the customer takes the order until the moment they receive it
wherever they are.

As Rappi, Glovo's business model is based on the hiring of delivery people ("glovers") who act as
self-employed workers, without, therefore, establishing an employment relationship of employed
persons (employees).

The company was founded in September 2014. Its first administrators were Oscar Pierre Miquel
and Marta Ripoll de Damborenea [1]. Pierre, a young man from Barcelona, would soon join Sacha
Michaud, until then responsible for Betfair in Spain and Portugal, to start the expansion of the
company from 2015 [2]. The initial investment was around €120.000 euros [3] and since then, they
have gone through several rounds of financing to raise funds from investors (especially venture
capital) and enable the growth of the firm. The most recent round ended in April 2019 and was
worth €150 million euros [4]. By September 2019 the company had already expanded to 26
countries and offered its services in more than 200 cities around the world [5].

In Spain, the labor inspectorate has issued reports in which it considers that this regime
constitutes a "false self-employed" relationship, so that the couriers do not have the power to
negotiate their contract or their remuneration and the organization and mandate of the
deliverymen with clear protocols [6]. In this sense, it has court rulings both endorsing and rejecting
the validity of the self-employment regime in Glovo's business model [7].

Although Glovo was a company created to make easier people's lives and many of its consumers
feel comfortable and satisfied, the economic strategies proposed from the beginning were not the
best, starting because after five years, there are still more losses than gains.

2. OBJECTIVES

Despite the fact that each year the operating income increases, the expenses increased faster,
requiring outsiders or companies to be able to invest in the business until reaching the point of
reaching the year in which there are profits. All these points will be analyzed.

Determine if any digital marketing strategy has been used by Glovo to achieve an effective
relationship with its target audience. Starting from this general objective, specific objectives can
be analyzed such as:

 Establish the digital ecosystem used by Rappi.

 Identify the strategy in each digital medium.
 Analyze the strategy and establish the process from the semiotic discourse and semantic.
 3. EXISTING KNOWLEDGE

Glovo, one of the most widespread and controversial home delivery products in Spain, presented
its accounts. The numbers are significant: Turnover has gone up, but global losses have gone up
much more. Present in 200 cities in 26 countries, the company has a similar trend to that of other
emerging technology companies: it is growing based on rounds of financing, because it has already
raised more than 300 million dollars, but even though that, it is still far from being profitable [8].

The data presents several elements of risk. The company accumulates millionaire losses and
several worrisome factors: it depends on external financing; much more money is spent on 'riders'
than on employees, there is a danger that one day these dealers will be considered by justice as
employees with all their rights and will face a legislation that can limit the logistics of the business.
This is a journey through Glovo's business in recent years, its fight against riders, legislation and
justice, and a future that, in the short term, appears far from financial sustainability.

Glovo increased its turnover last year by 268%, from 14.2 million euros in 2017 to 52.3 million in
2018. However, its expenses have increased much more: compared to 23.3 million in 2017, last
year this figure rose to 96.4. In total, there was a growth of 313.6% in one year [8].

YEAR INCOMES (SALES) OPERATIONAL EXPENSES NET INCOMES

2016 € 1.243.441 € 5.888.391 € (4.644.950)
2017 € 14.208.863 € 23.325.390 € (9.116.527)
2018 € 52.311.485 € 96.481.298 € (44.169.813)
TOTAL € 67.763.789 € 125.695.079 € (57.931.290)
Table 1. Glovo Net Income evolution. Value in €

GLOVO'S NET INCOMES EVOLUTION

€ 120,000,000

€ 100,000,000

€ 80,000,000 INCOMES
OPERATIONAL EXPENSES
€ 60,000,000

€ 40,000,000

€ 20,000,000

€-
2016 2017 2018
Image 1. Glovo Net Income evolution. Value in €
With all this, the annual balance has only grown in negative since the birth of the company in
2015. In 2018, Glovo lost 45.7 million euros. Compared to the 5.6 million lost in 2017, the increase
in losses has been 711% in twelve months.

TOTAL LOSSES

€ (614,199)
€ (4,524,202) € (5,643,789)
€ (10,000,...

€ (20,000,...

€ (30,000,...

€ (40,000,...

€ (45,782,556)
€ (50,000,...
Image 2. Glovo Total Losses. Value in €

Despite these huge losses, thanks to external financing since 2015, the startup has raised $ 322
million. These loans come, above all, from large investment funds that have paid for their growth
and expansion in the market at the cost of the fight for profitability.

TOTAL INVESTORS
DATE AMOUNT INVESTED INVESTORS
mar-15 € 140.000 Business angels
nov-15 € 2.000.000 Antai, B. Hernández, Félix Ruiz, Z. Dentzel
ago-16 € 5.000.000 Caixabank, Seaya
sep-17 € 30.000.000 Cathay, Rakuten
jul-18 € 115.000.000 AmRest
abr-19 € 169.000.000 Lakestar, Idinvest
TOTAL € 321.140.000  
Table 2. Total investments since Glovo´s birth. Value in €

For José Domingo Roselló, economist at the Technical Cabinet of the UGT, “this regime is anchored
on unfair competition. Glovo is not financing itself in the real market, but thanks to financing
rounds to go to waste as long as it takes until be left alone”.
However, Pol Oliver, “head of global finance” of the company, is emphatic with this situation:
“Glovo will be profitable, of course. If we continue with a growth similar to that of recent years, in
two or three years, we will begin to give benefits in several of the countries in which we are
present”. “And how will that profitability come, according to the company?” “Generating business
in the cities where we are present and accessing new markets”.

The manager believes that the 'startup' is more than supported: “We have clear market support;
just look at the last round of financing that we closed in April this year, when we raised 160
million”. In addition, he states: “we have the trust of users (more than 7 million worldwide and
almost 2 million of them in Spain), of delivery people (30,000 active worldwide, 7,500 of them in
Spain) and of businesses associates (currently 20,000 partners)” [8].

PROBLEMS WITH THE LAW

Almost since the beginning of its activity, Glovo has been accumulating various judicial and
administrative processes that must elucidate the professional nature of its distributors. The
company considered them self-employed at the beginning and Trade (Economically Dependent
Self-Employed Workers) later, but there are those who do not think the same and consider that
they should be fully employed. Several of its 'riders' have complaint and denounced the company
and the results, for now, are insane: some Social Courts located in Madrid and Barcelona consider
that the distributors should be autonomous, but the Social Court 1 from Vigo, 29 from Barcelona
and 33 from Madrid understand and agree that these are false freelancers who must be hired as
employees [8].

In addition, during the first quarter of this year, the 'startup' has received several settlement
reports from Social Security for a total amount of 5.5 million euros: 3.8 million in Barcelona,
another million in Valencia, 380.000 euros in Zaragoza and 271.000 euros in Malaga. Just a month
ago the Labor Inspectorate has also urged you to include 180 employees from Granada as
employees.

The company recognizes in its accounts the risks associated with these processes: “These
inspections, although not firm, have determined the labor nature of the dealers. The lack of
regulatory regulations and the absence of firm jurisprudential criteria make it possible that the
Administration could come to consider the distributors as labor personnel of the company”. This
means, that in the moment that the relationship with the distributors is announced to be working,
the company should pay Social Security contributions with a surcharge for these professionals,
also deriving contingencies for withholding of personal income tax."

If we combine the trials with 'riders' and the struggles with the Labor Inspectorate, Glovo
recognizes that today its labor advisers “cannot reliably estimate whether these procedures will
end in favor or against society and consider it possible the risk”. In any case, the company expects
that these procedures may be resolved favorably in the last instance, that is, by recourse to
current decisions of Labor or the courts.
In any case, Pol Oliver is optimistic: “We are convinced of our business model and that the
relationship that unites us to the distributors fully complies with current legislation. We have had
eight favorable judgments and many others unfavorable, reflecting that there is a need for
regulation in a booming sector to which norms or rules of the last century cannot be applied.
Therefore, we request a regulatory framework adapted to the new labor relations derived from
digitization, without destroying a model that has been shown practical and useful for all parties
involved”, he says.

THE PROBLEM WITH THE RIDERS AND ITS EMPLOYEES

The debate on 'riders' and their treatment as employees or as independent self-employed is not
only relevant at the legislative and judicial level, but also financially. We can see it by looking at
the Glovo accounts, which currently have around 300 employees and more than 30,000 'riders'
(7,500 of them in Spain): how much does the company spend on the salaries of its employees and
how much on the remuneration of its distributors? ? Exact figures are difficult to establish, but
there are fairly close approximations. The company has the heading 'Services of independent
professionals', which, according to its own report, "basically includes the cost corresponding to
delivery people".

According to the press release sent by the startup, in 2018 it allocated 38.5 million euros to pay
the 'riders', a figure slightly lower than the 45.7 million that appear in the heading of services of
independent professionals that show their accounts. If we take this second data as a reference, we
can see the evolution, and the figures speak for themselves: the 'startup' spends four times more
on the 'riders' than on the employees and the cost of the dealers represents 47.3% of the
company's total expenses.

YEAR TOTAL EXPENSES   RIDERS % FROM EXPENSES   EMPLOYEES % FROM EXPENSES

2016 € 5.888.391   € 2.098.851 36%   € 1.272.811 22%
2017 € 23.325.390   € 13.588.183 58%   € 2.750.621 12%

2018 € 96.481.298   € 45.702.030 47%   € 8.603.957 9%

TOTAL € 125.695.079   € 61.389.064 49%   € 12.627.389 10%
Table 3. Total investments vs. Cost of Riders vs. Cost of Employee. Value in €

POWER OF RIDERS IN GLOVO

€ 120,000,000
€ 100,000,000 TOTAL EXPENSES
€ 80,000,000 RIDERS
€ 60,000,000 EMPLOYEES
€ 40,000,000
€ 20,000,000
€-
2016 2017 2018
Image 3. Power of riders with Glovo.
The disproportion is evident: Glovo has one hundred times more distributors (30.000) than
employees (300) and 4.4 times more is spent on the former (38.5 million) than on the latter (8.6
million). Is it normal for a company to have more self-employed collaborators than employees and
that the payments to the former represent almost 50% of its expenses? Roselló, from UGT, does
not believe it: “The Company is totally dependent on delivery drivers. Although Glovo says that it
is a technology company, in reality it has very little technological capital, it is a delivery company,
and the best proof of this is that disproportion between distributors and employees. And that the
distributors are essential is the proof that they cannot be simple self-employed, but workers”.

Furthermore, Rubén Ranz, coordinator of the same union, refocuses on the conditions of the
'riders', brought up for debate, especially after the death of one of them: “Glovo averages 1,300
euros for 40 hours of work to each delivery man, but to us those figures do not add up. To begin
with, to get that money the delivery man needs to make two orders per hour and that is
impossible, there are many dead moments without any order. In addition, each delivery man pays
Social Security, the maintenance of a vehicle about 450 euros per month, according to the surveys
and the data that the dealers give us”.

THE CLOSEST COMPETENCE

Glovo is not the only company with a growth model based on financing, increased losses and
dependence on self-employed workers who fight in court to be recognized as employees.
Deliveroo, which competes in its same sector, is in a very similar situation. The Spanish subsidiary
has not presented data since 2016, when it invoiced 3.8 million euros and lost 5.6 million, but they
are not relevant figures either, since this subsidiary operates under the dependency of the parent
company, which provides it with money whenever it needs to.

Deliveroo's central tax operations are in London and its parent company has a very similar fate to
that of Glovo: in recent years, its turnover has increased but also its losses. In 2017, the last year it
presented accounts, the company billed £ 277 million, but its bottom line recorded losses of £ 178
million.

In addition, Deliveroo is also constantly pending in the courts. And his latest news was a historic
defeat, which was inflicted on him by more than 500 delivery men, who were classified not as self-
employed (the figure they worked for), but as fully dependent workers. This thrive came thanks to
the intense work of Labor Inspector María de Mingo Corral, who led the inspections against the
company and the arguments in favor of the 'riders' in the macro-trial.

Uber's situation is also assimilated to that of Glovo and Deliveroo. The company depends on
freelancers both in car driving and in home delivery of food (Uber Eats). Beyond trials with these
workers, his greatest battle is being fought at the legislative and judicial levels against the taxi and
the regional laws, which have led to his departure from Barcelona and his limitation in Madrid.

At the business level, its situation is worse than ever: the company has received more than 24,000
million dollars of financing, but it does not stop losing money, its shares in the Stock Market are
falling and its arrival to profits seems increasingly difficult. In fact, the company itself even
acknowledges the likelihood of the catastrophe coming: “We may not achieve profitability”.

The survival of these companies, therefore, goes far beyond their mere financial accounts. In the
case of Glovo, his future will depend on reversing his million dollar losses, but also on what the
courts and the Labor Inspectorate decide on the labor treatment that his 'riders' deserve. Until
both situations evolve in one direction or the other, the future of the Spanish 'startup' will be
unknown.

4. INTENDED OUTCOMES

According to the information found for the existing knowledge, it might say that it is expected to
find that there could happen to things, Glovo, like Uber and Deliveroo in Europe, or Rappi in
America have the same problem, in their first years they don´t generate profits but losses, this is
why this market research, to analyze all the situations and generate a forecast about what can this
enterprise do in their incoming years.

For the initial situation stated on the last point, it is normal to say that this enterprise will go to
bankruptcy really soon, it is hard that a five year old enterprise can survive to a loss of almost €58
million, this is why in this research will be analyzed how did Glovo do, to arrive to this situation
and what can be the possible solutions to this problem.

Besides al that, this research could be the first analysis done to organizations like this, like it was
said before, this is not the only enterprise dedicated to the home or workplace delivery products,
like Glovo, there are several companies as Uber and Uber Eats, Rappi, iFood, Deliveroo, etc. These
enterprises are passing or just passed through this complicated situations. This research will help
to identify which enterprise is on the same situation as Glovo or which one of them have a better
position now. If all of them are on the same situation, the most probably thing to do, it would be
to step back and finish with the enterprise (If there is enough liquidity to pay the debts). If there is
a situation like the second one, the best thing to do, it would be to study it and see if that thing
that made the enterprise survive the crisis, can be applicable as well to Glovo.

5. TARGET DEMOGRAPHICS

To be very detailed in this section, it is precise to start with a closed segmentation of all the
interpretations of the segmentations thought by Glove before starting the enterprise. The analysis
obtained is shown right below:

 Geographical segmentation: Glovo adapts to the different cities where it operates to be

able to offer the most demanded products and to be connected to the different locations
in the city in order to meet consumer demands as quickly as possible.

 Demographic segmentation: In this sense, Glovo is especially geared towards a young

audience that has a mobile device and easy use of mobile applications. It seeks to attract
 people of both genders and with practically any salary since they offer a cheap service
suitable for everyone. This people can be segmented as well by people who do generally
hard work and do not have much free time and offers them a service to facilitate any day-
to-day needs they have. Therefore, look for people from an upper-middle class who are
consumers. Although in this segmentation can be also found young people who is starting
to be independent and they may use the app for make their lives easier.

 Behavioral segmentation: Glovo targets relatively young people who have a basic grasp of
technology and know how to use a mobile app. Although also, the application has a very
easy design so that everyone with a phone can make use of it.

In this case, this research will focus on the demographics segmentation, because this is the
segmentation that uses the app the most. According to Carolina C. Jaramillo, the marketing
manager for Glovo in America Central, as the Glovo´s users as the “Glovers”, the range of ages of
each of one of them is between 26 and 45. This is due to this range of ages are the people with
more financial stability and more knowledge of how to use of technology and social media [9].

6. DATA COLLECTION

The best way to collect data related with this research to be suited is using all the tools that
internet gives us. It is planned to do a research using the tool of surveys via the Internet, phone or
email, because it is the easiest and costless way to see and analyze what people think about the
problem. In this case a Google Form was used. The questions and structure of this form will be
shown right below:
 Image 4. Survey to analyze Glovo´s customer service.

This survey was created short and clear, because it is a fact that few random people could take
some of their times to help to fill all this survey, that is why this was created to be short, clear and
accurate, to see which are the big problems about the platform or the service or in the other case,
whether everything is ok and seeing if the financial problems in this company is related with
something else.

The plan is, to achieve a minimum of 100 surveys (to start) and selecting randomly a sample of 10
surveys. People will find out about the survey through the same app, but in addition to this, there
will be 4 people from customer service in charge of randomly calling people within the target
demographic, who want to answer the survey without any problem.

This survey was segmented by incomes, ages, competence, whether use Glovo or not, how people
think about the service and if this app is recommended or not. According to the results, the
marketing can be focused on the financial situation of people, what can they find in the
competence that they don´t find in Glovo, if the times of delivery are good or if they something
else to add to improve the service.

The link to fill the survey is found here:

https://docs.google.com/forms/u/1/d/e/1FAIpQLSfOLQobgiCINlzesSf0jyoyT3ZfE-
4GQb_xDXUBj9pUcaa-hw/formResponse
 7. RESEARCH METHDOLOGY

The methodology by a survey seems a great too to analyze the issues with Glovo’s customer
service. This is why the survey was done. For this research method, it was preferred to use the
platform of Google Forms, because all the information this platform receives, it changes into
statistics, counting the amount of times the survey was done and restructuring all the questions
into a type of chart. All this to measure in a better way what people think about this kind of service
and what do they think about Glovo.

This way, Glovo may understand as well all the people needs, to analyze the demographic
segmentation. In this way, Glovo´s customer service can make the interpretations of the results
and the analysis of what kind of people is the one who uses the app and another related apps the
most. Therefore, they can focus the customer service in two things: Strengthen the satisfaction
with the people that uses the app the most all this to do that people don’t think in another app
like this.

In the other hand, they also can see the people who use the app usually, merely or don’t use the
app at all, to see why they don’t do it and after that, think in strategies to make Glovo attractive or
even more attractive to them.

Although all this survey can make outcomes like these in this market research, it has some
limitations. Even though this survey was short, clear and detailed, that doesn’t mean that
everybody which this survey were sent, will do it. This is the limitation of this method of data
collection. Between more surveys were done, the better; so this is why it is crucial that there were
more surveys, because it is better to analyze a whole population of 100 people than just a random
simple sample of 5 people.

It is hard to find any kind of errors in this kind of research, but it may happen, this is why this
Google Form Survey was sent to trustworthy people, besides the idea of making it short and clear
to everybody, to make it easier to fill it, understand it and make it more interpretative to the
whole people.

8. TIMELINE
WEEK 1 WEEK 2 WEEK 3 WEEK 4 WEEK 5
ACTIVITY
M T W T F M T W T F M T W T F M T W T F M T W T F
PHASE I
Analyze the problem
Determine the goals of the research
PHASE II
Write the questions and wait for approval
Create and set the survey (QA)
Make the survey
Analyze the results
Image 5. Timeline for the marketing research.
The timeline proposed for this research was planned for four weeks, which was divided in two
phases: The phase 1 for the project go-ahead, it means the time to analyze the problems, identify
the goals to achieve and the tools to use. It was determined two weeks for this phase

The phase 2 is the execution. After planning the tools to use (surveys in this case), the next part is
preparing, setting and analyze the outcomes of the survey. It was determined another two weeks
for this case.

9. PROPOSED BUDGET

Table 4. Total proposed budget for the project.

This budget was proposed for phases and planned for just a month, which is the timeline planned
for the project. The total of people was planned to be 8 in total: 2 for researches, 4 for call center
agents in charge of obtaining people to do the survey and another two to analyze the outcomes
obtained in the survey.

10. ETHICAL CONSIDERATIONS

Throughout the duration of the project, all the participants were aware of the ethical aspects that
this entails. For example, the format of the interview and the call center agents were careful in the
matter of the name of the people, since at least, in the interview that question does not appear, in
addition to the country where they are from; this is because salary questions were handled and
this is already compromising.

In addition to all this, the people who were involved in this project without knowing it, that is, the
interviewees, were clearly informed of everything before starting to conduct the interview, that is,
why the study was carried out, that all the information from This survey was confidential and it
was practically impossible to know who answered what. This builds trust between people and
gives them a little more confidence and reassurance to answer the survey.

The call center agents chosen for the project have the necessary experience and all the training
required to build confidence in the people with whom they communicated, in addition, as
previously stated, all this information is confidential and it is very difficult to know Who responds
what, by the way the form was made.

That is why the agents are trained enough to treat people with honesty, dignity, charisma and all
the kindness that a call to ask for collaboration to carry out a survey requires. This gives people a
certain air of confidence and energy so that they want to carry out the surveys and feel confident
that nothing will happen to their personal information, beginning with the fact that when they
open the survey, they realize that There is no information nested with personal information (it is
not necessary to have email accounts, or to know names or country of origin to carry out this
survey). Confidentiality is guaranteed.

11. FURTHER OUTCOMES – INDIVIDUAL

12. REFERENCES

[1] «371160 - GLOVOAPP23 SL». Boletín Oficial del Registro Mercantil (178): 40462. 18
de septiembre de 2014. Consultado el 27 de septiembre de 2019.
[2] Terrasa, Rodrigo (16 de mayo de 2019). «Qué hay detrás del fenómeno Glovo: las dos
caras de la nueva economía digital». El Mundo. Consultado el 27 de septiembre de 2019.
[3] Pita, Elena (10 de julio de 2018). «Glovo: la empresa made in Spain que revoluciona el
delivery en el mundo». Expansión. Consultado el 27 de septiembre de 2019.
[4] «Glovo cierra una ronda de financiación de 150 millones para ampliar su negocio».
Cinco Días. 30 de abril de 2019. Consultado el 27 de septiembre de 2019.
[5] «Glovo pasa en seis meses de operar en 100 ciudades a más de 200». Agencia EFE. 3 de
septiembre de 2019. Consultado el 27 de septiembre de 2019.
[6] «Los argumentos de la Inspección de Trabajo para desmontar la "libertad" de los
repartidores de Glovo». eldiario.es. 27 de diciembre de 2018. Consultado el 27 de
septiembre de 2019.
[7] Ponce de León, Rodrigo (4 de junio de 2019). «Dos sentencias validan el modelo de
riders autónomos de Glovo en un momento crítico para la compañía». eldiario.es.
Consultado el 27 de septiembre de 2019.

[8] https://www.elconfidencial.com/tecnologia/2019-09-07/glovo-oscar-pierre-riders-deliveroo-
startups_2210647/

[9] https://elperiodico.com.gt/inversion/2019/06/03/esperamos-crecer-un-62-por-ciento-en-
ordenes-carolina-c-jaramillo-gerente-de-marketing-para-glovo-en-centroamerica/