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Will Asda and Just Eat’s foodie joint venture be a success?

Asda’s partnership with Just Eat is a joint venture between complimentary brands with the unique selling point of delivering groceries in 30 minutes. The tie in between the brands should mean that legally the parties share the costs and risk of the new services with each party only having to perform obligations which they already perform according to each of their own respective business models, with maybe a few tweaks to provide for sharing of assets between the parties. Asda’s core business is the supply of groceries and Just Eat’s business model is the technology platform and the delivery of the groceries. Successful joint ventures generally are those partnerships where each party does not stray too far outside their own business models, as is the case here.    

A joint venture between Asda and Just Eat will mean that Asda does not have to invest heavily in its own technology and delivery service as it will be able to use Just Eat’s technology platform and delivery drivers. This means potential savings for Asda as well as another revenue stream for Just Eat. Win-win!  It seems as though the cost of the deliveries to shoppers by Just Eat will also be cheaper, which means consumer benefits as well. 

The legal implications of the joint venture will mean that each of Asda and Just Eat will agree to perform their respective obligations. At a basic level the obligations of this joint venture will be that Just Eat will permit Asda to list on its technology platform, Asda will agree to make available for delivery the groceries ordered by the shopper and Just Eat will agree to deliver the groceries to the shopper. 

The joint venture will also set out how each party is to hold the other party to account if anything were to go wrong. The agreement will set out who is liable in foreseeable scenarios and what the remedies will be.  As Asda will be relying heavily on the Just Eat technology platform so I would assume that Asda will have received certain promises regarding the “uptime” or “downtime” of the website to ensure that shoppers have the best possible online access. Just Eat, I assume, will have sought promises that Asda will ensure that groceries are ready to be collected on time so that Just Eat may complete the delivery. 

As the joint venture has been trialled as part of Asda’s pizza service, the parties have dipped their toes into the water and have clearly established that the trial has been successful and are therefore rolling this model out further to Asda’s groceries. The trial pizza service has been a shrewd move by both parties, to establish whether the model can work without committing significant time and resource. Many technology suppliers are more than happy to permit users to trial its service to show the user what can be achieved and once the user is bought into the technology it is a far easier up-sell added extras.

In today’s fast delivery culture, shoppers clearly have a need for speedy groceries (as opposed to the current delivery methods of a two-hour delivery window) so, if successful, competitors in both the online shopping market and delivery market are likely to follow this model in the near future.    

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