Ava AbbottInstacart is an online platform based in San Francisco, California, which provides on-demand food delivery services. It was founded in 2012 by Apoorva Mehta and expanded its grocery delivery and pick-up service to Chicago, Boston, Atlanta, Miami, and Washington DC within three years.
By 2018, the firm had partnered with several retailers, including Walmart, Aldi, Staples, Food Market, Kroger, Sam’s Club, Publix, and Costco. Today, Instacart delivers to more than 5,500 cities in North America. [1]
In Mar 2021, Instacart raised $265 million at a valuation of $39 billion. The online grocery giant added more than 300,000 personal shoppers and now has 500,000 active shoppers on its platform. Instacart plans to build automated fulfillment centers with hundreds of robots to fulfill customers’ orders more efficiently.
Each $6.5-million facility will have more than 150 robots and handle over 700 orders a day. Automating this process will cut costs and increase Instacart’s competitive edge over top alternatives like Shipt, Amazon Fresh, and Walmart+. [2]
Here is an in-depth analysis of top Instacart’s competitors and alternatives:
1. Amazon Fresh
Year founded: 1994
Headquarter: Seattle, Washington
Amazon is a global e-commerce powerhouse, with more than 2 million sellers on its US third-party store. Its Amazon Fresh platform is an online grocery store like Instacart. Consumers can purchase fresh produce, meat, dairy, seafood, packaged foods, and Whole Foods 365 products via Amazon Fresh.
Like Instacart, Amazon Fresh offers grocery delivery for free. But this service requires Amazon Prime membership.
Instacart is growing fast but won’t catch up with Amazon anytime soon. According to projections, Amazon will have more than 7.5 million sellers globally by the end of 2022. In 2020, Amazon generated $189 billion in revenues from the US market and over $360 billion globally. [3]
When Amazon acquired Whole Foods in 2017, Instacart’s future was bleak. But it reinvented its processes and doubled its valuation doubled in 2020 to over $39 billion.
Currently, Amazon generates 40% of all e-commerce sales in the US, which gives Amazon Fresh an advantage over Instacart. Amazon Fresh is Instacart’s top competitor for many reasons. [4]
2. Walmart+
Year founded: 1962
Headquarter: Bentonville, Arkansas
Walmart is the world’s largest retail chain, with more than 11,500 stores and 2.2 million employees in 27 countries. The retailer has a robust e-commerce platform that offers free same-day grocery pick-up and delivery. In 2020, Walmart generated $524.4 billion in revenues.
Its marketplace attracted more than 70,000 sellers. Walmart’s online sales in 2020 were $64.6 billion, nearly double Instacart’s valuation.
In Sept 2020, Walmart launched its new subscription-based service, Walmart+, for $98/year or $12.95/month with free home deliveries. The retailer also offers grocery deliveries via Walmart Grocery. This online grocery store is similar to Instacart. But it is available in 16,00 cities, while Instacart caters to more than 5,500 cities.
Walmart Grocery requires membership to access free deliveries. However, its offerings are cheaper than Instacart across the board. With Walmart+ and Walmart Grocery, Walmart is a formidable Instacart competitor. [5]
3. Shipt
Year founded: 2014
Headquarter: Birmingham, Alabama
Shipt is a leading online same-day delivery platform similar to Instacart. In Dec 2017, Target Inc. acquired Shipt for $550 million. The company generated around $1.5 billion in annual revenues before its acquisition. In 2020, Shipt contributed to a 273% surge in Target’s same-day services.
Like Instacart, Shipt also offers personal shopping and free grocery delivery on orders over $35. Both Instacart and Shipt made several partnerships to expand their platforms. In Feb 2020, Shipt partnered with GNC to offer health and wellness products on same-day delivery.
This deal came a few days after Instacart partnered with Family Dollar to deliver via its network of over 6,000 stores. Instacart and Shipt give users access to quality offerings from reputable retailers. They are evenly matched across the board. Shipt is the perfect Instacart alternative. [6]
4. FreshDirect
Year founded: 1999
Headquarter: New York City, NY
FreshDirect is an online grocery delivery service that operates in the US market. The company has around 3000 employees and generates more than $600 million in revenues annually. In Jan 2021, Ahold Delhaize and Centerbridge Partners acquired FreshDirect and now own 80% and 20% of the e-grocer. [7]
In 2020, FreshDirect launched Express Delivery Service to deliver meals to customers’ doorsteps. Customers can pay extra to get their meals in a 60-minute window. These offerings can entice some customers from Instacart.
Ahold Delhaize plans to build micro-fulfillment centers (MFCs) for FreshDirect on the East Coast. These MFCs will expand FreshDirect’s market presence nationwide and increase its competitive edge over Instacart. [8]
5. DoorDash
Year founded: 2013
Headquarter: San Francisco, California
DoorDash is the largest online food ordering and delivery platform in the US. It controls 55%-60% of US food delivery market. In 2020, DoorDash had 3,886 employees and generated $2.886 billion in revenues.
In Jun 2021, DoorDash signed a deal with Albertsons Cos. to offer on-demand grocery delivery. DoorDash will deliver groceries from nearly 2,000 Albertsons-owned stores, including Vons, Safeway, and Jewel-Osco.
With this partnership, DoorDash now competes directly with Instacart and other e-grocers. Consumers can order from more than 40,000 Albertsons’ grocery items via DoorDash’s top-rated marketplace and get their orders within an hour. After the announcement, DoorDash shares surged 3.51%, and Albertsons gained 2.87%. These spikes indicate consumers’ approval and demand for the service. As the largest food delivery company in the US, DoorDash is now one of Instacart’s top competitors and alternatives. [9]
6. Cornershop
Year founded: 2015
Headquarter: San Francisco, California
Cornershop is a Chilean upstart that offers on-demand food and grocery delivery service. Uber bought more than 50% of the company in an all-stock transaction. In Jul 2020, the rideshare giant acquired the remaining 47% interest in Cornershop.
With Uber’s expertise and financial resources, Cornershop can now capitalize on the growing demand for food deliveries.
On Jul 16, 2020, Instacart filed a lawsuit against Cornershop over allegedly stealing thousands of its copyrighted and licensed images. Instacart has spent at least $17 million since 2015 to create and maintain its catalog.
Cornershop is still a startup, but it has already established itself as Instacart’s archnemesis. With Uber Eats’ experience and networks, Cornershop threatens Instacart’s market share and profits. [10]
7. Dumpling
Year founded: 2017
Headquarter: Seattle, Washington
Dumpling is a startup in the food delivery space, established by Joel Shapiro and Nate D’Anna to challenge the status quo in the gig economy. It provides shoppers with all the resources they need to migrate from Instacart and start their own business.
Shoppers pay a one-time $10 fee to set up and then a $39 monthly fee or a $5 per transaction fee for booked jobs. In 2020, Dumpling’s order volume spiked by 20x. The company raised $6.5 million in Series A funding to expand its capacity and meet the demand.
Dumpling has helped more than 2,000 personal shoppers in 50 states to start their own personal shopping business. This model allows users to make around $33 in earnings per order, about three times more than Instacart users. Instacart shoppers get $7-$10 per order.
Unlike Instacart, Dumpling’s customers can select the same shopper again. All these factors make Dumplings the best alternative to Instacart for personal shoppers. [11]
8. Google Shopping
Year founded: 2002
Headquarter: Mountain View, California
Formerly known as Google Express, Google Shopping is an online service that allows consumers to search for products online. Users can compare the prices of items offered by different online shopping sites, vendors, and stores. The competitive advantage for the tech giant is its search engine.
For example, Google searches for “curbside pick up” increased 9,000% from March 2020 to March 2021. Google is combining these search results with Google Maps to improve user’s shopping experience.
In Apr 2021, Google announced that it is adding shopping information to stores’ Business Profiles on Maps and Search. Instacart and Albertsons’ stores will be the first e-grocers to get additional info, including nearly 20 brands offered in over 2,250 locations nationwide.
The tech giant also signed a multi-year deal with Albertsons to develop shoppable maps, AI-powered e-commerce, and predictive grocery list building. These new features will increase Google Shopping’s advantage over Instacart. [12]
9. Peapod
Year founded: 1989
Headquarter: Chicago, Illinois
Peapod is a grocery delivery service that operates on the East Coast of the US. The grocer offers fresh produce, meats, frozen foods, alcohol, meal kits, and ready-to-eat meals. With over 30 years in the sector, Peapod is more experienced than Instacart. It has around 3,000 employees and makes over $97 million in revenues annually.
Peapod and FreshDirect are owned by Ahold Delhaize. Unlike FreshDirect, Peapod has reduced its service area. In Feb 2020, Peapod closed its operations in the Midwest to focus exclusively on the East Coast.
Peapod Digital Labs will remain in downtown Chicago. Overall, Peapod is one of the best Instacart alternatives for consumers on the East Coast. [13]
10. Thrive Market
Year founded: 2015
Headquarter: Los Angeles, California
Thrive Market is an online grocery store. It specializes in healthy organic and non-GMO groceries. Consumers pay a membership fee of $60/year or $10/month to access up to 25% to 50% discounts.
Thrive Market’s competitive edge is its product variety. Consumers can access more than 6,000 healthy products in hundreds of categories. Members get free shipping on all orders above $49, higher than Instacart’s $35 limit. Thrive Market is the best Instacart alternative for healthy, organic groceries. [14]
References & more information
- Google is partnering with grocery stores to streamline your shoppingRedman, R. (2021, Apr 28). Instacart’s campaign turns the spotlight on its personal shoppers. Supermarket News
- Soper, S. (2021, Jun 1). Instacart Bets on Robots to Shrink Ranks of 500,000 Gig Shoppers. Bloomberg
- Naidu, R. (2021, Apr 14). How the pandemic helped Walmart battle Amazon Marketplace for sellers. Reuters
- O’Brien, S. A. (2021, Mar 23). Amazon was supposed to kill Instacart. Instead, Instacart became a mini-Amazon. CNN Business
- Repko, M. (2021, Jan 12). Walmart will test grocery deliveries to a smart cooler on customers’ doorsteps. CNBC
- Walton, C. (2021, Feb 16). What Amazon was in 2005, Shipt and Instacart may be in 2021. Forbes
- Redman, R. (2021, Jan 05). Ahold Delhaize wraps up FreshDirect acquisition. Supermarket News
- PYMNTS (2021, Mar 18). FreshDirect Looks to Micro-Fulfillment for Post-Pandemic Expansion. PYMNTS
- Bursztynsky, J. (2021, Jun 21). DoorDash and Albertson’s partner on same-day grocery delivery from nearly 2,000 stores. CNBC
- O’Brien, S. A. (2020, Jul 16). Instacart is suing Uber’s grocery delivery service Cornershop. CNN Business
- Mascarenhas, N. (2020, Jul 20). Dumpling launches to make anyone become their own Instacart. Tech Crunch
- Pomranz, M. (2021, Apr 02). Google is partnering with grocery stores to streamline your shopping. Food and Wine
- Shoemaker, S. (2020, Dec 8). Peapod Review: Pros, Cons, and Comparison. Healthline
- Leighton, M. (2020, Sept 10). Thrive Market is an online grocery store that sells organic foods at wholesale prices. Business Insider
- Featured image by Maria Lin Kim
Brianna Parker
Kevin Johnson
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