foodpanda’s continent-wide exits signal an exciting time for Delivery Hero with a huge and rapid amount of growth in countries, market size and opportunities
It’s estimated that 12 per cent of the US$70 billion global food ordering market happen online. According to a report by Cowen and Company, by the year 2020, the online food ordering market will be worth more than the offline segment.
Despite the potential, Rocket Internet has pulled back food ventures like foodpanda in most markets, with the exception of frontier nations like Pakistan. Depending on who we ask, the reasons change, but a constant is their inability to raise capital.
Recently, Hellofresh put its IPO plans on hold after one of Rocket Internet’s major investors backed out because of concerns over valuation.
Now, foodpanda has made it clear to all countries where it operates to “get profitable or we shut down.” Afterwards, foodpanda is making possible exits and has shut down its controversial tax-evading Vietnam office and their teams in Singapore have been let go. All the central team members are being posted into different countries as MDs.
Other shakedowns will be in Indonesia or Malaysia. Meanwhile, it already sold its latest venture foodora to Delivery Hero last year, so they can compete with deliveroo. This was why they bought 40 per cent stake in Delivery Hero.
Started in 2010 by Niklas Östberg, Delivery Hero is growing rapidly, with over 34 countries and international teams, ensuring that hungry customers have instantaneous access to their favourite takeaway food.
foodpanda’s continent-wide exits signal an exciting time for Delivery Hero with a huge and rapid amount of growth in countries, market size and opportunities.
To get more depth, I met Delivery Hero’s Bodo von Braunmühl a month ago, and inquired about the basis of a few strategic decisions it had adopted in the past two quarters.
What are the characteristics of markets that Delivery Hero is interested in?
Relevant size, good infrastructure and a competitive environment that allows us to become market leader in a foreseeable future.
What’s Delivery Hero’s top performing market in Asia and in Europe?
Our top performing markets in Asia are Korea and China. In Europe, we are particularly strong in Germany, the UK, Sweden and Turkey.
What was the strategic point of acquiring foodora?
We consider food quality as one of the mega trends of our industry. Since foodora offers delivery from hand-picked quality restaurants, customers can expect a consistent and locally-relevant value proposition in terms of food quality, variety and value, with a reliable and fast delivery service to back it up.
Another strategic point is the further expansion into delivery logistics. Other than our global competitors at Delivery Hero, we want to control and improve the whole order process including the last mile.
After signing up all the food vendors in a given market, what does Delivery Hero focus on?
Signing up the food vendors is only one part of the business. For Delivery Hero, it’s also about establishing partnerships with 200,000 restaurants, including quality management, enabling us to continuously improve quality and processes.
Besides, we care for innovative PoS technology, marketing for the restaurants, customer service and delivery logistics. It’s fair to say that the online food ordering business is a highly complex one. Last but not least, we consider our product as key for our service. We want to build platforms and apps that are way ahead of the competition.
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