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Just a year after entering the Japanese market, the German food delivery team Delivery Hero – known as its Foodpanda brand in Asia – announced its release, citing greater competition and fewer drivers.
The decline reflects the challenges facing food suppliers in Japan and elsewhere in Asia, where regional players face world-class giants. While the export market is expected to continue to grow, workers are being forced to reconsider their growth strategy, with experts saying corporate integration is expected in the coming years.
Delivery Hero entered Japan through its Foodpanda brand in September 2020. Based on the growing demand for food due to the Covid-19 epidemic, the company expected the third world economy to become a major market for the company and contributed significantly. raw materials used there.
Foodpanda CEO Jakob Angele, who directs the company’s operations in Asia-Pacific from its headquarters in Singapore, stayed in Japan for three months from late 2020 to early 2021 to build the business in a new market. With great experiences in a variety of markets – from Singapore and the more developed Taiwan to the forthcoming Bangladesh – Foodpanda was confident in its entry into Japan. It originated in major cities such as Kobe, Yokohama and Nagoya, with the goal of expanding its food-shipping business faster than food.
But as a native of Japan, the team faced stiff competition.
This article is from Nikkei Asia, an international publication with unique Asian views on political, economic, business and global events. Our writers and foreign commentators from around the world share their views on Asia, while our Asia300 section provides in-depth information on 300 fast-growing and fast-growing companies from 11 financial countries outside Japan.
Leading Japanese market participants are two participants: Uber Technologies and Demae-can, a Tokyo-based company with the help of the Line messaging app. According to a US user, the Uber Eats food delivery service has approximately 130,000 restaurants and other outlets on its Japanese platform. Demae-can announced on December 24 that it had exceeded 100,000 stores. Both companies are still selling large sums of money to find users – Demae-can also reported a loss of ¥ 20.6bn ($ 179m) in the fiscal year that ended in August.
Foodpanda did not specify the number of restaurants on its platform in this country. But its presence has been weaker than that of the two giants. Of the approximately 3,600 people surveyed in an online survey conducted in February by Japan’s ICT Research and Consulting, 428 people said they used Demae-can, while 426 people said Uber. Only 34 used Foodpanda.
In addition, Covid-driven interests attracted other users: The US Ubor Competition DoorDash entered Japan in June. DoorDash has grown after the recent acquisition of € 7bn ($ 8bn) by the Finnish Wolt, which has been operating in Japan since March 2020. Well-known Chinese giant Didi Chuxing re-launched the food delivery business in Osaka in 2020 and has since served in five regions. three.
“Since the start of the operation, the Japanese market has changed dramatically,” Foodpanda’s Singapore representative told Nikkei Asia, after announcing the withdrawal. “External factors, such as the number of players and the decrease in riders, brought realities by the end of this year.”
The decline of Foodpanda reflects the competitive Japanese market – where small-scale employees face the challenge of attracting customers and employees. But the same situation can be observed in other Asian markets, where US, European and local companies are locked in a fierce competition, while sales to buy customers and drivers limit profits.
In Singapore, for example, UK Foodpanda and Deliveroo chase homemade superapp in three ways. The Indonesian market is one of the strongest among Asian companies. Gojek’s Gojek’s GoFood Gojek and Grab’s GrabFood are the biggest players, but the Singaporean tech peer Sea has rapidly expanded its mission to bring ShopeeFood to Indonesia last year.
Before Foodpanda announced its departure from Japan, industrial integration in the region was already underway. In July, Gojek sold most of its Thai business, including food, to Malaysia’s AirAsia. Gojek had a 7 per cent share in the Thai catering market in 2020, down behind Grab at 50 per cent, Foodpanda 23 per cent and Line 20 per cent, according to a study by the Singaporean consultancy Momentum Works.
Food companies are expected to grow in most markets. For example, in Southeast Asia, the market value of the market is expected to rise to $ 23bn in 2025 from $ 12bn in 2021, according to a report released in November by Google, Temasek Holdings and Bain & Co. Japan, an ICT Research and Consulting report shows that market growth will grow 38 percent to ¥ 682bn from 2020 to 2023.
But the release of Foodpanda in Japan shows that not everyone can benefit from this growth. “The food delivery system is ultimately a very low-cost business that has to generate large quantities and quantities in order to be profitable,” Jianggan Li, head of Momentum Works, told Nikkei Asia.
Change of management system management system management system management system management system management system management system management system management system management system management system management system management system management system management system management For example, in August, the Prime Minister of Singapore and the Prime Minister of Singapore a few of the delivery staff and asked for greater protection, which would bring more funding to support the operators on the platforms. In some Western lands, it is customary for companies to regard drivers as employees rather than as independent contractors. The latter method allows motorists to reduce costs but provides less protection for drivers.
As wars rage in Asia, many workers are thriving to provide food and other necessities.
Leaving Japan, Foodpanda said it was expanding its business to bring “fast sales” to other markets. “We are constantly aware of new growth opportunities in the region, in different markets, larger regions and new verticals, especially in terms of rapid commercialization,” Foodpanda representative said.
Grab, which is also expanding its supply chain for GrabMart, announced the acquisition of a Malaysian supermarket in December, which could help expand its grocery delivery business.
“Competition is still fierce,” said Li, noting that some workers had more money. “The problem for every player is how they can continue to grow and multiply while improving performance at all levels. They have to do it all in a very competitive environment.”
Foodpanda is planning to sell its business in Japan in the first quarter of 2022. The eviction was a “very difficult decision”, the company said. But there may be more and more purchases of food companies in the area.
“I think in a number of markets, there are more than two major food chains, not to mention those who just want to buy,” Li said. “It’s difficult to see the market in the short term to be able to accommodate profitable players.”
Kind of a story first published by Nikkei Asia on December 27 2021. © 2021 Nikkei Inc. All rights reserved
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