With tightened measures in place yet again, F&B operators have put away their tables and chairs as dining out is banned for the third time since the pandemic began.
Luckily for many, the “circuit breaker” last year had already prepared them for what is to come. Business, no doubt, will be impacted. However, thanks to food delivery platforms such as foodpanda, the decline will be somewhat mitigated.
Jakob Angele, foodpanda’s CEO for Asia Pacific, urges F&B operators to focus on optimising revenues in times like these. “The single most important thing for restaurants during lockdowns is that they get to keep their business open. And foodpanda is able to provide them a strong stream of revenue to allow them to keep their kitchens open and pay their staff and so on,” says Angele in an interview with The Edge Singapore.
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However, Angele acknowledges that restaurants are able to cope better than the smaller food stalls around, such as those in the hawker centres and coffee shops. And that is where he wants to focus more of foodpanda’s efforts. “We realised that hawkers in particular are heavily affected because they are very small businesses that operate more on a cash flow basis, they don’t have much of a safety net to fall back on,” he says.
As a member of the Action for Alliance for Hawkers (AFA), foodpanda has introduced initiatives to help these smaller players to get on board its platform. The company has cut commissions and given discounts for hawkers, provided free food photography as well as taking the time to educate and hand-hold those who are less tech-savvy.
One such instance is Jin Wang Dim Sum, which operates a dim sum stall in a food court. Founded by Chua Jun Ming and his father in May 2018, they had hoped things would return to normal after three, four months last year following the first lockdown. Unfortunately, it looks like there is a permanent “new normal” they have to adapt to.
Jin Wang Dim Sum, which signed with foodpanda in May, has an “extremely smooth” experience so far, says Chua, citing quick response to queries and “substantial” marketing support. “If we don’t evolve, we would eventually be left behind and lose out on valuable opportunities,” says Chua.
Synergetic diversification
Since it started operating in 2012, foodpanda has expanded to over 400 cities across 12 markets in Asia Pacific. After building a network of riders and a name in the F&B delivery scene, foodpanda has moved and diversified into delivering groceries.
“With the size foodpanda has grown in the region, we will look into smart and highly synergetic diversification. And for us, pandamart is highly synergetic.
“We could have gone ahead and diversify into other aspects like video streaming or ride hailing but what I want to really stress is that it is key that our diversification is highly synergetic to our core business,” says Angele.
In 2019, Delivery Hero, the parent company of foodpanda, launched into what is dubbed “quick commerce”, or q-commerce, the next generation of e-commerce. The company’s ambition is to bring groceries and household items to customers in under one hour, often as fast as 10–15 minutes.
Besides working with grocers and convenient stores such as 7-Eleven, the company has built its own network of 200 “cloud” grocery stores dubbed “pandamarts” across eight markets in this region, carrying over 5,000 unique items ranging from fresh produce, snacks to household items and more.
Already staking claim to the title of operating the largest cloud store network, the company aims to double the number to 400 stores by end of the year. “With that, we can cover a lot more, although not every corner of all the countries we are in but we intend to cover every single corner of Singapore, which we are already doing today,” says Angele, who adds that now, more than ever, people need this service and he intends to bring more of this service to the people.
To be sure, the online grocery scene is also one that is growing during this pandemic period. Foodpanda noticed that consumer appetite for online grocery delivery grew by 450% y-o-y in its q-commerce verticals as consumers turned to its fast, safe and convenient on-demand home deliveries.
Demand for fresh produce on pandamart more than trebled in just six months between October 2020 and March this year, while overall grocery orders more than doubled in the same period, while total grocery goods orders grew about 2.5 times during that period as consumers turned to fast, safe and convenient on-demand home deliveries.
Driving forward
Admittedly, all of foodpanda’s expansion plans could not have been carried without the fleet of riders bridging the gap between the businesses and the consumers. The way Angele sees it, foodpanda is not just an avenue for businesses to gain more consumers and cash flow, but it also gives over 100,000 riders across the region a fair income stream and flexible working hours.
As the platform tying everybody together, foodpanda has to ensure harmony with all its key stakeholders — customers, riders, F&B and grocery mart operators. Only then can foodpanda drive towards growth.
“The food delivery industry is still a very young industry today. If you think about it, our average customer orders five to 10 times with us a month. But if you think about how often a single person interacts with food, it is about 90 to 120 times a month. So, that tells us that there is still a huge opportunity in this industry,” reasons Angele.
“And because this is still a young industry, it also means that we need to do a lot of investments to develop this industry and grow business further,” he adds.
As a result, foodpanda, with the backing of parent company Delivery Hero, will be investing a “huge amount” in technology, as well as marketing promotions to attract more customers.
As at July 26, shares in Delivery Hero are trading at about EUR129.40 ($207.5), some 365% higher from when it first listed on the Frankfurt Stock Exchange in June 2017 with an opening price of EUR27.80. In its latest 1QFY2021 ended March, its orders placed by consumers on its platform were 88% higher y-o-y at 663 million 1QFY2021 with gross merchandise value (GMV) up by 83% to EUR7.8 billion and revenue increasing some 116% to EUR1.4 billion.
Overall, Delivery Hero expects FY2021 to record a GMV of EUR31–34 billion and revenue to come in between EUR6.1–6.6 billion. The company has also unveiled ambitions to invest in new markets. Japan is foodpanda’s latest addition to its portfolio and today, it has reached over 20 cities in Japan. “We have very bullish assumptions in Japan,” says Angele, adding that Vietnam is another market in its sights.
Overall, for foodpanda, its goal is to be on everyone’s phones and to be the one-stop solution when it comes to food and groceries. “We are excited about the future and we come from an incredible growth journey. So, we are looking forward to the Covid-19 period done and behind us, although it will still take a while,” says Angele, while noting that investments in technology will help spearhead foodpanda’s growth in the region.
Photo: foodpanda
