Amazon Hurts Everyone in E-Commerce, Says Bringg CEO

Amazon’s service hurts all players in the e-commerce industry, according to Guy Bloch, CEO of Tel Aviv-based on-demand delivery startup Bringg Delivery Technologies Ltd. Online sellers have lost their own customers to Amazon, Bloch said in a recent interview with Calcalist.

“They lost control over customer data, which is the basis of understanding consumer behavior, they lost all opportunities for cross-sales and have to pray Amazon offers their products at checkout,” he added. The irony here is that they also pay Amazon a commission for this service, Bloch said. “The sellers have become another commodity on Amazon’s platform and that is not sustainable.”

Founded in 2013, Bringg develops Uber-like management software for third-party delivery suppliers and counts Coca-Cola, Kimberly-Clark, and Walmart among its clients. Bringg is active in 50 countries worldwide and employs some 130 people, most of them in Israel, as well as in offices in Chicago, London, Austin, and Sao Paulo, Brazil. The company has raised over $57 million, according to Pitchbook data, from investors including Aleph Venture Capital, German conglomerate Siemens AG, and Israeli entrepreneur Shmuel Harlap.

Like many other startups in the sector, Bringg is attempting to catch up with Amazon when it comes to last-mile solutions. The last mile is considered the most crucial part of the product’s journey from store to customer and has inspired Amazon to set up giant logistics centers and truck fleets and train hundreds of thousands of employees.

Those looking to catch up with Amazon must offer diverse shipping options, serve a wide geographic area, and live up to their word when it comes to delivery times. Unlike Amazon, they have to do it with limited cash flow.

Bringg’s platform interfaces with retailers’ existing systems, connecting to clients, inventory tracking systems, storage management, and drivers. The software autonomously makes customizable decisions for retailers, helping them ensure swift deliveries or increase their geographical reach. This is done through outsourcing to external partners already operating a delivery fleet, mostly under the gig economy model, such as on-demand delivery company Postmates Inc. and food delivery services Wolt Enterprises Oy and DoorDash Inc., as well as partners managing storage facilities, such as on-demand warehouse company FLEXE Inc. Bringg’s algorithms manage the retailers’ deliveries, optimizing the use of drivers and storage facilities.

Working with Bringg gives DoorDash and Postmates’ drivers more gigs, encouraging them to remain with the company, Bloch said. As with every gig economy venture, those who benefit the least are the drivers, who might be getting more work but still suffer from poor working conditions and lack of benefits.

Bringg is by no means the first company to try and outsource deliveries. In fact, Amazon beat Bringg to the punch years ago, partnering with outside contractors to meet its delivery needs. “Amazon has so many resources that it is hard for a single company to compete, but if the entire industry works together, it could create opportunities,” Bloch said. As an example, Bloch compared Apple’s closed iOS system to Google’s open-source Android system. “As an open platform, Android managed to bring in so many players that it became bigger than iOS,” Bloch explained.