An Upstart Startup Takes On the Old Guard
By Cristina Adams
May 2024
When the founders of Jüsto decided to break into Mexico’s complex grocery landscape, they had their work cut out for them. The industry, dominated by the likes of Soriana and Walmart, hadn’t seen a new competitor in 30 years. And now this upstart startup was planning to take on the old guard’s brick-and-mortar universe as the country’s first online-only supermarket.
Nobody said it would be easy. Alejandro Sisniega, Jüsto’s head of new business, freely admits there have been plenty of challenges since the company opened its virtual doors in 2019.
“Mexico is by far our most complex market,” he says. “Our business model is unique in the region. The other [groceries] have e-commerce, but their core business is physical stores. And even though we don’t have physical stores, we compete with those retailers. It’s complicated.”
Being a purely e-commerce business hasn’t prevented Jüsto from growing its customer base in Mexico or from expanding to Brazil and Peru. Indeed, customer retention rates are robust and increasing.
In just four years, Jüsto has experienced more than 400% growth in Mexico and, at last count, had 3,000 employees.
Alejandro attributes much of the company’s success to a meeting in 2019, when the startup was in its infancy. At that gathering, the executive team agreed to focus on a value proposition based on three verticals: fresh produce, grains and proteins (frescos más frescos), order fulfillment (pedidos completos) and on-time delivery (pedidos a tiempo). Together, those verticals are known as the Jüsto promise, and their creation helped solidify the company’s commitment to consumers and lead it on a path to success. As if to underscore their importance, Alejandro proudly points to Jüsto’s 99% fulfillment rate and 99% on-time delivery rate — neither of which, he notes, is easy to accomplish in Mexico.
One advantage Jüsto has over other retailers is control of its entire supply chain. From proprietary technology (including a warehouse management system) to operations and logistics, Jüsto is in charge. The only outsourcing goes to a company that provides drivers and vehicles.
“We have an exclusive contract with them,” Alejandro says. “They’re not employees, but they’re ours. So we really control the whole process.”
Even so, there are downsides to running your own show. The grocery industry is already capital intensive; with no outsourcing, the cost of doing business goes up exponentially. Still, in just four years, Jüsto has experienced more than 400% growth in Mexico and, at last count, had 3,000 employees. There’s little doubt the growth and hiring will continue.
“Since that meeting in 2019, we have been loyal to the plan we came up with,” Alejandro says. “We think it’s the winning strategy.”