One decade but 50X the growth. It’s not often one sees numbers like that. And yet, that is the projected rate of growth for the food delivery industry in Southeast Asia, one study shows. This mammoth potential market is the one that trouble-ridden European food delivery firm Foodpanda wants to crack.
Founded in 2012, the company had quickly established a wide footprint across Asia and some Eastern European countries before it hit a rough patch in 2016. It shut down its business in Indonesia and sold its Vietnam and India units.
It looked like defeat.
But in late 2019, the year in which ordering food on-demand went from being a once-in-a-while activity to a regular habit for many, the tables turned.
Foodpanda’s parent company Delivery Hero, founded in Germany and listed in Amsterdam, acquired South Korean food delivery firm Woowa Brothers in a $4 billion deal. And Southeast Asia’s little red dot, Singapore, is the headquarters for the new Woowa-Delivery Hero Asia joint operations, making the region the epicentre of this food delivery empire.
Foodpanda 2.0 anyone?
Southeast Asia represents a big growth opportunity for the sector. East Asia countries like South Korea, Taiwan, and Hong Kong are considered relatively mature markets and Woowa has been operating profitably at home for some years already.
“In more mature food delivery markets […] food delivery is estimated to make up around 10-15% of the overall F&B spend,” a spokesperson from GrabFood, on-demand platform Grab’s food delivery arm, told The Ken. Grab offers food delivery in six countries across Southeast Asia at the moment. “In Southeast Asia, this number stands at less than 5% […] there’s significant headroom.”
Indeed, the combined total value of online food orders (called gross merchandise value, or GMV) is poised to hit $5.2 billion by the end of the year, the joint study by Google, Temasek, and Bain projected—more than doubling in size from 2018.
By 2025, this number is projected to breach the $20 billion mark.
And Foodpanda is getting ready for it. The company is moving its R&D centre from Berlin to Singapore and wants to develop its own mobile wallet, a former Foodpanda employee told The Ken.
