App-based food delivery service provider Foodpanda remains committed to Myanmar despite the ongoing political unrest that has disrupted internet services in the country, the company’s chief executive told Nikkei Asia.
The service company, which operates in 12 economies, is an Asia-focused unit of Germany’s Delivery Hero, one of the world’s major food delivery companies, along with Meituan of China and Uber Technologies of the U.S. Delivery Hero recently merged with Woowa Brothers, South Korea’s largest food delivery operator, making it the biggest delivery operator in Asia outside of China. Foodpanda will continue to operate as the same brand and in the same markets under the merged group.
In an interview with Nikkei Asia, Foodpanda CEO Jakob Angele acknowledged that business in Myanmar is currently “very limited.”
Myanmar’s military, which seized power on Feb. 1, has shut down the country’s mobile internet and cracked down on protests, resulting in the deaths of hundreds of citizens.
Many businesses face difficulties staying in operation due to manpower shortages and supply chain disruptions, with some companies already halting investments or expansion plans in the country.
“There are lots of obstacles to operating smoothly,” he said, “but one thing which is really important for us is that we look at Myanmar with a long-term lens.”
Foodpanda, which launched services in Myanmar in December 2019, has become one of the nation’s major food delivery platforms, attracting thousands of restaurants and about 200 employees.
“We were very happy with [our] progress before the current situation,” Angele said. “It was very promising for us, and we stayed committed to the country. Despite the current complications, no change on strategy on that. We look at the opportunity in 2023, 2025, and so on, where we want to build a foundation today. So for us, it’s not a question of days, weeks or months.”
Amid the post-coup crisis, the company is promoting a “pick up” feature in which customers place online orders from home and collect their meals themselves. Nikkei Asia understands that home delivery is also available in some cases as some drivers, no longer able to accept deliveries via the mobile web, gain internet access via restaurant Wi-Fi networks.
“As much as possible, we try to operate the business,” Angele said.
Last year it was the second biggest player after Grab in Malaysia, the Philippines, Singapore and Thailand in terms of gross merchandise value, according to January research by Singaporean consultancy Momentum Works (GMV measures the total value of merchandise sold on a given platform).
Foodpanda does not operate in Indonesia, the region’s biggest economy, where Grab and regional rival Gojek intensely compete.
Foodpanda will likely face more competition as Grab goes public later this year. The Singapore-based “superapp” operator plans to raise as much as $4.5 billion and is expected to spend some of the funds on technology toward building more efficient delivery systems. Grab said its delivery business GMV last year was $5.5 billion and that it expects a compound annual growth rate of about 39% in the three years through 2023.
Angele said delivery specialist Foodpanda can differentiate itself from competitors that operate multiple businesses. “It’s very difficult to be operational detail-oriented when you, on the other hand, want to do fintech and then you think about becoming a superapp.”
Angele stressed that in Foodpanda’s nine years it has focused on “operational details” such as making faster deliveries and charging fair commissions to restaurants.
In Japan, Foodpanda is in 25 cities. It started servicing Tokyo in late April and plans to “put a lot of resources” into strengthening its footprint in the capital, Angele said. It also plans to expand into other areas of the country. The company sees opportunities in smaller cities that existing players like Uber have not fully penetrated.
One key regionwide strategy to counter rivals is grocery deliveries. It is building what it calls Pandamarts — cloud supermarkets from which delivery drivers pick up items. The first one launched in October 2019, and there are now about 200 Pandamarts across eight markets, the company said.
According to parent Delivery Hero’s financial statements, the group’s Asia revenue for the first quarter of 2021 more than doubled to 629 million euros ($760 million), thanks to strong pandemic-driven demand. Angele said the competition is “a bit stronger” in Asia than in the rest of the group’s markets but that Foodpanda is already profitable in some markets, giving the Germany-based group leeway to further invest in Asia.
This article was first published on Nikkei Asian Review.