"If I had told people three or four years ago that one day we’d be selling coffee machines by home delivery, they wouldn’t have believed me," says Lior Eshkol, the outgoing Wolt Israel CEO. Over the past four years, she has led its transformation from a niche home delivery service app delivering sushi, pizza, and hamburgers from 26 restaurants in Tel Aviv into a beast dominating almost all areas of life, from restaurants to groceries, pharmaceuticals to swimwear - even sex toys. Today, the app covers 9,000 businesses, works with 20,000 couriers, and serves millions of consumers who use it daily
But the person who established Wolt as the undisputed queen of delivery has remained fairly anonymous. Eshkol is now moving to a position in Wolt’s global management, and a man with an equally impressive resume will step into her shoes: Tomer Cohen, BuyMe CEO. Just prior to the transition, "Globes" met with Eshkol at the Wolt Israel headquarters in south Tel Aviv, a green building that has gradually taken over more and more offices and floors in the complex.
In this special farewell interview, Eshkol talks about the journey to fulfill her plans for expansion, shares the challenges of four rocky years between the Covid pandemic and the October 7 war, and also responds to grievances against Wolt, from its terms of employment, claims of wild driving on the part of couriers, to tangles with the Israel Tax Authority.
"It's called hunger, not food"
"I arrived at Wolt in October 2020, a company with a great product and brand, when the app was already the coolest thing on the Tel Aviv food scene. Still, even then I believed this success had space for broader value, and we started two journeys simultaneously - one was going beyond Tel Aviv, and the other was understanding it was possible to expand beyond restaurants. Today, we already have 80% coverage of the population, and every third order is non-restaurant.
"In every sector, we plan the most appropriate value proposition, the one that will require you to choose me every day: customers, couriers, and businesses. I’m obsessed with customer experience, and I’m always learning for constant improvement."
The word ‘obsession’ comes up a lot in conversation. For example, the process of adapting supermarket shopping to Wolt, for both customers and businesses. "Every time someone types something in the search bar and it's not there, we send a message to the supermarket, 'Hi, please note that you don't have this certain type of shampoo.' Every time someone is mistakenly delivered 5% cottage cheese instead of 9%, we monitor that data and forward it to the business. Our culture is obsessed with the learning experience, and luckily, we have volumes of order data that allow us to learn a lot in the process; almost all the big supermarket chains work with Wolt, such as Shufersal and Victory.
"For us, it means believing in something, understanding what the customer experience should be, and concluding what’s right for the businesses. To succeed in the supermarket sector is very difficult and competitive, with very smart players, and it is something we’re very proud of. "
You described two vectors, vertical and geographic. Which one has been more significant in terms of growth over the last four years?
"Both. Firstly, you can't just be in Tel Aviv, because we don’t live in the State of Tel Aviv. You have to know how to work in Jerusalem or in small villages, otherwise you’re not going to be attractive. Besides the additional income, it expands the customer value. 30% of customers order from outside their area. Secondly, you can't just do restaurants, because then you’re only in one segment. The first city we launched after I came in was Netanya. Imagine the percentage of the population then, as compared with today. In addition to the fact that today, every third order is in retail. Both have significant volume in terms of expansion - financial and conceptual."
Are you more a startup or a service company?
"What’s special about Wolt is that growth is in both the digital technology and the operative environments. I think there’s entrepreneurship here, like at a high-tech company or startup. It's called hunger, and it's not about the food we deliver, but the hunger to create. I'm originally an engineer, I worked in a high-tech environment, and the feeling of entrepreneurship is very similar. But there is an operative environment here, and that’s something unique to the Israeli landscape. There are startups that know how to dream big, as we do here, but we can learn from every order and every interaction. So, this is entrepreneurship in a scale-up environment that is also digital, and also operative."
Wolt is also no longer just a connecting thread between businesses and consumers. It has started its own business, Wolt Market, which competes with the supermarket chains and enterprises like Yellow (the convenience stores at Paz gas stations). Eshkol points out, "It's a separate part of the company. It's not even with us in the building, and is managed completely separately. It has the same DNA as Wolt, but as far as we're concerned, it's another business within the app."
Do the supermarkets also see it that way?
"I believe so. They know we’re doing something right with supermarkets. The chains don’t make mistakes, they know what’s right."
A CEO at 34
As mentioned, Eshkol brought about a transformation when she took Wolt out of the restaurant sector, and into a huge marketplace that comes to your door in 30 to 60 minutes. Nonetheless, she has been diligent about staying out of the limelight.
She began her career as an intelligence officer in the IDF, went on to study industrial engineering and management at Tel Aviv University and worked as a programmer. After a few years, however, she realized that programming was not for her, and she gravitated towards the business world, starting at Procter & Gamble in Israel. She later moved to Boston to study at Harvard University, worked at Amazon and WeWork, and then returned to Israel. At just age 34, she spotted a LinkedIn job offer to be CEO at Wolt, then still a private company, submitted her CV, and the rest is history.
Eshkol has now been promoted to a position in Wolt global management where she will be responsible for activity in strategic markets, including Israel. "I came from multinational companies, and it was great to bring this understanding and thinking here. Now, I’m proud to bring Israeli growth to other Wolt areas. I’ll be responsible for strategic processes at Wolt and DoorDash."
In June 2022, Wolt was acquired by US food delivery company DoorDash for €7 billion. Wolt is currently the international arm of the merged company, DoorDash International, comprising Wolt's 28 markets and the parent company's three non-US markets in Canada, Australia and New Zealand.
Where will you live? In Israel?
"We haven't decided yet."
And how does DoorDash view Israel?
"Israel is a large, strong market for Wolt. It’s usual to think of Israel in the context of research and development, but we’ve proven there is also a significant consumer market here. And the Israeli consumer, when they are given good service, appreciates it."
Constant expansion
It seems that every few weeks Wolt announces it is entering another new region in Israel, even during the war. In February, activity launched in Eilat, in the Gaza envelope two months ago, and recently in Kiryat Gat. Eshkol describes the latest launch as one of the most exciting in memory. "We started activity at nine in the morning on a Tuesday, and seven minutes later, the first order, of pharma products, had already come in. Especially at times like these, the ability to play a significant part for people and add value to customers and businesses, is a source of pride."
Launches are worked on for quite some time, from defining the vision, through creating partnerships with restaurants and businesses, to locating couriers. Teams visit each area, study them, with some couriers coming from nearby so they can get on the road easily. Wolt had planned to launch in the Gaza border region earlier this year, but was delayed due to the war. Now, in addition to locals, IDF reservists on active duty are also using the app.
What do you think the next growth stage could be?
"We’ve created an infrastructure, upon which many things can be built. Each time, we examine where we can increase added value for customers, and work from there. For example, through searches. We check to see what customers have been looking for but didn’t find. That’s how we came out with over-the-counter drug delivery, among the significant things we’ve done in recent years. We saw that one of the most common searches was paracetamol, and we worked with [Shufersal pharmacy chain] Be and the Ministry of Health to develop it."
How does it work with the parent company? How involved are they?
"They are involved. Both Miki Kuusi, CEO of Wolt Worldwide, and Tony Xu, CEO of DoorDash, have been here quite a few times. One thing they’ve noted about the Israeli market is not only Wolt’s success, but also the Israeli entrepreneurial character. They saw the level of innovation and the speed of response during Covid, and that’s something that has no equal anywhere in the world."
Responses to all grievances
Of course, it is impossible to talk about Wolt without referring to a controversial issue: its employment conditions. "Wolt has about 20,000 active couriers all over the country, who choose to earn a living in a flexible way on the platform. They have the app, and they decide when to go online, and which deliveries to accept. This is supplementary income that diversifies the job market, and like the new consumer reality, this too is new reality that we’re very proud of, it has its place, all over the world. It also has a place in the economic landscape, and is part of that diversity."
Those opposed will say that you are a big, serious company, and should take responsibility. That you’re a part of a broken labor system, that you don't provide proper social conditions.
"These discussions take place everywhere in the world, and this is how things are conducted at every company of this type (in fact at delivery service 10bis, for example, couriers are employees). What’s important to remember is that this is supplementary income. Most couriers are with us for about eight months and for relatively limited amounts of time during the week. It's something extra along the way, not the main thing.
"Wolt's remuneration for a courier is relatively high, about NIS 70 per hour. In the end, making a living in a flexible way has a great deal of value for couriers, because reality has changed. The world of work goes through changes every few years, and you have to understand how to deal with them."
You are actually kind of a monopoly vis-a-vis the restaurants. Anyone not on the app doesn’t really exist. And you take a good portion of their income, a 25% commission. There isn’t really freedom of choice here.
"A business has to pay rent, pay their chefs. We tell them to use what they have to maximize revenue. We must make it profitable for 9,000 businesses to open their iPads every day to receive orders. And that's our job, to make sure it's profitable for them. My goal is to give them good service. A small business can suddenly get the exposure of a big business. This is my added value and my job is to prove it.
"Secondly, it allows us to provide a small business with a delivery experience, visibility and customer service like that of a large business. They don't have to worry about when the courier will arrive, or what service the customer will receive. They know we provide everything so that they can do what they do best, and we will help them get additional income with the same standard of service."
So, why the complaints?
"I sat down a week ago with the CEO of a large retail chain, who told me: ‘Thanks to you, we don't need to set up a logistics center, and that saves us a lot of money. In practice, these are businesspeople, and they don't do things that don't pay off for them. Time after time, we’ve seen so many businesses join us after launches, because they see the economic activity happening in their city, and the possibility of gaining additional income. And one day, if we disappoint, it won’t be worthwhile for them anymore. There are complaints and there is reality, and we work hard to provide this value over and over, because there’s no purpose without it."
And how do you deal with couriers’ reckless driving?
"I'm from Tel Aviv, and I know what they’re talking about. It's a very significant issue and it's a challenge we face. A year ago, we launched a safe driving training program for couriers, and already a year and a half ago we started numbering the motorcycles and created a dedicated phone line for reporting drivers. We have a team of more than 20 people who handle each report. It depends on the case, but the couriers know we don’t tolerate such cases, and there are dozens of couriers who don’t go on with us after incidents like these."
The only question that Eshkol doesn’t seem to have an answer for is the maelstrom over the two shekel "operating fee" announced in May 2023. Up until that point, it seemed like complaints about delivery fees, some of which are quite high, had been absorbed. But the additional fee caused much outrage with many threatening to delete the app.
How much of an effect did it have? It’s unclear. But when asked about the upheaval, Eshkol is silent. Whether an insufficient explanation or a directive from above, she finally states: "I cannot comment on this case specifically. But I will say that, in general, we work very hard to generate and maintain the trust of consumers, couriers and businesses, and this is something that is very easy to lose, and difficult to gain."
In addition, in May this year, the Israel Tax Authority revealed that Wolt’s VP Operations, one of the founders of the company in Israel and Eshkol's right-hand man, was investigated on suspicion of offsetting fictitious tax invoices amounting to at least NIS 230 million and tax evasion of approximately NIS 33.5 million, claiming he was involved in offsetting fictitious tax invoices against companies that provide pay-slips to freelancers and workers carrying out errands for various companies, including Wolt. In fact, Wolt stopped working with third-party companies back in 2022, due to, among other things, these investigations, and requires couriers to register as freelancers as a precondition for working with it.
Where does the investigation stand today?
"I cannot comment on an ongoing investigation. It is understood that the company is cooperating fully with the authorities and we are confident that our activity has not been tarnished."
Follow the consumer
Is there any area you would not be willing to enter?
"The areas where I would say 'no' to are the ones where the revenue stream doesn’t provide added value. We may get to those in time, but when you’re growing so rapidly, the matter of focus is very important."
Have people ever ordered something that’s surprised you?
"A week and a half ago, someone bought a vintage luxury designer bag at a second-hand store in Tel Aviv for thousands of shekels. I was amazed that she even thought to look for it on Wolt. When our saleswoman brought this store in, she said, 'Trust me, it makes sense.' And it’s proved itself. It's about going where the consumer takes you, following searches, checking what’s trending, and getting there in a very focused way.
"Our entry into fashion came with the launch of a free returns feature. This is a basic designation for the customer experience in fashion. Returns are very important to customers.
"We also learned that certain categories are more suited to this, like shoes. We’re learning a lot about how to manage livestreams, how to increase visibility. Three years ago, ordering from the supermarket was a completely different experience compared to today, because we were so obsessed with the most accurate customer experience. And we’re not done yet there as well. And that’s the process we do in every field we enter. There are no shortcuts."
Two years ago, you said that you sometimes go onto the app in front of customers to get to know their business from the inside, because that's how you make a change. What have you learned from those conversations?
"I still do it, under a different name," laughs Eshkol. "There's nothing like feeling what's going on with a customer. There was a family that ordered a meal on Friday night, and all the dishes arrived, except for one: the child's meal. This was a critical case for them, and it changed the whole way we provide compensation. And it's part of the cultural DNA of understanding the customer. We have to understand what’s happening on the ground. I also visit a lot of businesses."
The Arab sector launch
At that time, you also talked about crises, such as Covid and the [2021] Guardian of the Walls Gaza operation. How has the current war affected you?
"Wolt’s infrastructure knows how to manage itself even in emergency situations. October 7 was chaotic and uncertain but we, as management, were already on Zoom at 9 am. We couldn’t look only at our business. We are part of the economic and consumer reality in Israel, and the decision we made was that we had to remain open. And we have been open every day this year. We are part of normal life.
"However, we are a young company. Many of us are 26-27 years old, and many of us went to reserve duty. Unfortunately, we also have survivors of the Nova festival, and people who have been damaged in one way or another, but amidst all the chaos, we’ve tried to be an island of stability. We’ve held a management meeting every day, to make sure people are anchored.
"Rebuilding or continuing to expand is also being considered. We launched Eilat in February with the understanding that tourism had started coming back to the city. Launching in [Gaza border towns] Sderot and Netivot was very significant for us. It was important for us to preserve our position as an infrastructure and to create value. We also planned to launch activity in the Arab sector in October [2023], a few days after Sukkot. This was postponed to January, and so far, it's going well, with a dedicated team, customer service, and an app in Arabic. But we still have a lot to do."
Covid also posed significant challenges.
"I joined the company during the second wave [of the pandemic], and we learned to adapt very quickly, like providing contactless delivery. Covid seems like a distant memory to us now, but dealing with the war is very similar to our dealing with Covid at the business level - understanding that we must provide a solution because we are infrastructure for businesses.
"Conveying normality and continuity shows which elements of the Israeli reality we share. I didn’t believe we would ever need internal procedures for an Iranian missile attack, but given that, the sense of normality and continuity enables us to continue consumer activity."
Which has been the bigger business challenge? Covid or the war?
"Times are different now. Back then, we were more focused on the central region and restaurants. Today, we are part of everyday life in many places. It’s hard to say what is more challenging but the human dimension in wartime, unlike during Covid, is the hardest."
On which day and at what time are most orders placed?
"Thursday is a very strong day, it's a kind of a mini-coalescence of everything. People want groceries for the weekend and also want to have fun on Thursday evening. Holidays and fast days have an effect. We work locally and learn everything - where one city will be holding their Purim rally, and when Shabbat goes out in another."
What do you do differently from your rivals?
"We’re based on the understanding that both sides benefit from using the app. We must always make sure that it pays off. I measure myself in relation to myself. How we provide value to the customer and continue to learn. In a large company like this, it's not just what I do, but what the entire team does."
Where will you be in five years?
"If you had asked me five years ago, I wouldn’t have known that within a year I would be at Wolt. I hope and believe that I will be in a place where I will do something significant that affects the lives of consumers in Israel."
And how often do you order takeaway from Wolt?
"Quite often, but the truth is that I find Wolt useful in all aspects of life."
Published by Globes, Israel business news - en.globes.co.il - on October 2, 2024.
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