Justo, a Mexican online grocery store, has shut down its operations in Brazil following a three-year run, citing the challenges in a competitive market.
Despite a recent $70 million investment, including a General Atlantic-led equity round, the company ceased operations by mid-December.
In a statement on its Brazilian Instagram account, Justo expressed gratitude towards its customers. The company is expected to focus on its Mexican market, where it recently partnered with Amazon.
'This decision was not easy, as we are aware of the positive impact we have had on the market and our customers’ experience, offering a high-quality online grocery service, driven by innovation, technology, and freshness,' according to a statement signed by the Justo team, to which Brazilian daily Valor Economico had access.
Justo
Founded in 2019, Justo entered Brazil in 2021 during the COVID-19 pandemic. It offered a variety of products, including fresh produce, meats, and household essentials.
Customers could order online and schedule same-day delivery through the Justo website or app.
Intense competition from established players like iFood, Rappi, Carrefour, and Pão de Açúcar is likely a contributing factor to Justo's exit.
Grocery E-Commerce
While online grocery shopping remains popular, the business model faces unique challenges, especially as consumers return to in-store shopping. Even established players like iFood and Rappi have had to adjust their strategies.
In an interview for daily Folha de Sao Paulo, retail consultant Alberto Serrentino highlighted the difficulties of operating a purely online grocery store in a competitive market like São Paulo.
Balancing operations and profitability is a significant hurdle, as different food products require specific handling, storage, and transportation during delivery. Standalone online grocery models struggle to scale profitably without integration into larger platforms.
According to NielsenIQ Ebit's Webshoppers report, online food purchases in Brazil increased by 26.2% in 2023. A third of respondents reported using supermarket delivery apps monthly, indicating a growing demand for online grocery delivery.
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