German on-demand delivery giant Delivery Hero is pulling its food delivery service out of Germany again.
At the same time it has announced it will exit the Japanese market, by divesting Foodpanda Japan, starting in Q1 next year.
In a statement accompanying the pre-Christmas exit news, the company’s CEO and co-founder, Niklas Östberg, said: “Scaling down our operations in Germany and planning to divest our Japanese business have not been easy decisions. Facing a very different reality now than we did entering these markets, it is with a heavy heart that we need to pursue other growth opportunities with larger potential.
“Despite having built up two fantastic foodpanda teams showing great progress, it has become increasingly difficult to create true value for our ecosystem in these countries. I have nothing but gratitude and admiration for the accomplishments both teams have achieved in the last months. Seeing the amazing service they built from scratch makes me genuinely proud, and we will do everything we can to support our fellow Heroes on their journey ahead.”
The European on-demand delivery giant only fully returned to its home market — under its Foodpanda brand — in August, following a few weeks of testing.
Back in May, when it trailed the Germany relaunch in an interview with the Financial Times, Ostberg had talked in terms of being in it for a decade long-haul, telling the newspaper: “We don’t see necessarily that we are going to go in and win the market in the next year or so. This is a 10-year game.”
And only last month Delivery Hero was still expanding Foodpanda’s footprint in Germany — announcing the service would be launching into another six cities, as the division’s CEO, Artur Schreiber, trumpeted “great” demand and an expansion he said would create “a thousand” jobs.
Although that announcement also hinted that it might be having trouble getting customers to stick around — with Delivery Hero saying it would also be refreshing Foodpanda’s branding, launching a new app with a better user experience and expanding a loyalty program.
In the event it’s pulling the plug on a commercial delivery service in Germany — leaving only a Berlin-based R&D hub where it says it will test new services and features, so sounds like it will continue to run some (trial) deliveries in Central Berlin for employees working on developing new products.
It’s notable it’s not selling the Foodpanda Germany unit to a rival — as it did back in 2018 when it last pulled the plug on the market.
Delivery Hero either wants to retain the possibility of a rapid return in future; or — perhaps more likely — the local food delivery is so competitively tapped out there was little to be gained by selling the unit (unlike a few years ago when it was able to bag a meaty payout of ~the potential of grocery deliveries with the Delivery Hero CEO early on in the pandemic.
Germany, the EU’s biggest economy, has grabbed a major slice of this investor-heated q-commerce action — with homegrown startup Gorillas raising close to a billion dollars in Series C funding this October, for example; while Flink, another rapidly scaling rapid grocery delivery startup, nabbed \)"> 240M in the summer, a mere six months after launching.
Gorilla’s whopping Series C was — in fact — led by Delivery Hero so the writing was perhaps already on the wall for its local Foodpanda division at that point.
And in another Q-commerce related announcement earlier this month, Delivery Hero trumpeted an expansion of what it billed as a “logistics-a-service” play — suggesting it sees its future in serving delivery services to a growing sea of smaller (and more specialized) on-demand players.
“Partnering with e-commerce marketplaces and platforms, restaurants, as well as pharmaceutical and grocery companies, the company is changing the way that people buy and send goods,” was how it fleshed out the move, noting also that it has also recently opened its 1,000th “Dmart” (aka “small warehouses in strategic locations for delivery”).
Again, Germany is seeing on-demand action bubbling up on a variety of fronts — as homegrown startups seek to ride the q-commerce boom via a strategy of divide and conquer.
This means launching app-based delivery services that target (more) specific niches and segments — such as Yababa (multicultural groceries); Arive (high-end consumer goods); and Mayd (meds, but starting with non-prescription products sold in pharmacies) — to name three German startups which all raised recently.
The mood music suggests there are indeed opportunities for growth in quick commerce beyond the tricky business of biking hot meals to hungry bellies — and that the evolution of the on-demand delivery category is well underway.
This is about diversifying beyond takeaways and instant food gratification — to serving all sorts of convenience and specialist requirements and the platforms that will be needed to deliver that big picture vision of anything arriving quickly via app order.
In Europe there is also the issue of labor rights for gig platform workers to consider too, which looks set to further steer market developments — and could accelerate the reconfiguration of a business model that some accuse of being inherently exploitative.
Earlier this month EU lawmakers presented their legislative proposal on platform work which — if adopted — could see millions of gig workers reclassified as employees.
Östberg does not appear to be a fulsome fan of the proposal. Nor, indeed, of current German labor laws — which he has suggested make it difficult for platforms to hire riders.
In a series of tweets earlier this month, as the EU unveiled the draft legislation, the Delivery Hero CEO chipped in to offer the usual platform rebuttal — which seeks to frame the issue as a choice between employment or flexibility — making a call for “better terms for riders and more flexibility”.
However the academic research project, Fairwork, which tracks conditions for workers in the gig economy, argues it’s false framing to suggest it’s not possible for platforms to provide flexibility and fairness right now — although it has found only a minority do so currently.
Hence Fairwork accuses platforms of opting...
At the same time it has announced it will exit the Japanese market, by divesting Foodpanda Japan, starting in Q1 next year.
In a statement accompanying the pre-Christmas exit news, the company’s CEO and co-founder, Niklas Östberg, said: “Scaling down our operations in Germany and planning to divest our Japanese business have not been easy decisions. Facing a very different reality now than we did entering these markets, it is with a heavy heart that we need to pursue other growth opportunities with larger potential.
“Despite having built up two fantastic foodpanda teams showing great progress, it has become increasingly difficult to create true value for our ecosystem in these countries. I have nothing but gratitude and admiration for the accomplishments both teams have achieved in the last months. Seeing the amazing service they built from scratch makes me genuinely proud, and we will do everything we can to support our fellow Heroes on their journey ahead.”
The European on-demand delivery giant only fully returned to its home market — under its Foodpanda brand — in August, following a few weeks of testing.
Back in May, when it trailed the Germany relaunch in an interview with the Financial Times, Ostberg had talked in terms of being in it for a decade long-haul, telling the newspaper: “We don’t see necessarily that we are going to go in and win the market in the next year or so. This is a 10-year game.”
And only last month Delivery Hero was still expanding Foodpanda’s footprint in Germany — announcing the service would be launching into another six cities, as the division’s CEO, Artur Schreiber, trumpeted “great” demand and an expansion he said would create “a thousand” jobs.
Although that announcement also hinted that it might be having trouble getting customers to stick around — with Delivery Hero saying it would also be refreshing Foodpanda’s branding, launching a new app with a better user experience and expanding a loyalty program.
In the event it’s pulling the plug on a commercial delivery service in Germany — leaving only a Berlin-based R&D hub where it says it will test new services and features, so sounds like it will continue to run some (trial) deliveries in Central Berlin for employees working on developing new products.
It’s notable it’s not selling the Foodpanda Germany unit to a rival — as it did back in 2018 when it last pulled the plug on the market.
Delivery Hero either wants to retain the possibility of a rapid return in future; or — perhaps more likely — the local food delivery is so competitively tapped out there was little to be gained by selling the unit (unlike a few years ago when it was able to bag a meaty payout of ~
Gorilla’s whopping Series C was — in fact — led by Delivery Hero so the writing was perhaps already on the wall for its local Foodpanda division at that point.
And in another Q-commerce related announcement earlier this month, Delivery Hero trumpeted an expansion of what it billed as a “logistics-a-service” play — suggesting it sees its future in serving delivery services to a growing sea of smaller (and more specialized) on-demand players.
“Partnering with e-commerce marketplaces and platforms, restaurants, as well as pharmaceutical and grocery companies, the company is changing the way that people buy and send goods,” was how it fleshed out the move, noting also that it has also recently opened its 1,000th “Dmart” (aka “small warehouses in strategic locations for delivery”).
Again, Germany is seeing on-demand action bubbling up on a variety of fronts — as homegrown startups seek to ride the q-commerce boom via a strategy of divide and conquer.
This means launching app-based delivery services that target (more) specific niches and segments — such as Yababa (multicultural groceries); Arive (high-end consumer goods); and Mayd (meds, but starting with non-prescription products sold in pharmacies) — to name three German startups which all raised recently.
The mood music suggests there are indeed opportunities for growth in quick commerce beyond the tricky business of biking hot meals to hungry bellies — and that the evolution of the on-demand delivery category is well underway.
This is about diversifying beyond takeaways and instant food gratification — to serving all sorts of convenience and specialist requirements and the platforms that will be needed to deliver that big picture vision of anything arriving quickly via app order.
In Europe there is also the issue of labor rights for gig platform workers to consider too, which looks set to further steer market developments — and could accelerate the reconfiguration of a business model that some accuse of being inherently exploitative.
Earlier this month EU lawmakers presented their legislative proposal on platform work which — if adopted — could see millions of gig workers reclassified as employees.
Östberg does not appear to be a fulsome fan of the proposal. Nor, indeed, of current German labor laws — which he has suggested make it difficult for platforms to hire riders.
In a series of tweets earlier this month, as the EU unveiled the draft legislation, the Delivery Hero CEO chipped in to offer the usual platform rebuttal — which seeks to frame the issue as a choice between employment or flexibility — making a call for “better terms for riders and more flexibility”.
However the academic research project, Fairwork, which tracks conditions for workers in the gig economy, argues it’s false framing to suggest it’s not possible for platforms to provide flexibility and fairness right now — although it has found only a minority do so currently.
Hence Fairwork accuses platforms of opting...