Food Delivery Wars and Credit Acceptance's Underwriting Moat
In Practise Weekly Analysis
inpractise.com/articles/food-delivery-wars-and-credit-acceptances-underwriting-moat
Why is this article interesting?
In Practise reflects on some of the key lessons and major questions explored in one or more interviews each week
Food (and Convenience) Delivery Wars
We have always kept an eye on Germany and see tremendous opportunities to improve the customer experience. - CEO of Foodpanda, Delivery Hero
It was a big week for European food delivery companies. Delivery Hero announced it’s re-entering Germany to serve customers with restaurant food, groceries, and convenience. This is particularly interesting because Delivery Hero was founded in Germany under the Foodora brand but then sold to the larger, stronger Takeaway.com in 2018. Delivery Hero conceded on their home turf only to re-enter 3 years later with a plan to ‘improve the customer experience’. What is the opportunity they’ve seen? I thought marketplaces were so defensible that once someone wins, it’s near-impossible to compete?
Germany is the most competitive market in Europe with arguably the industry’s best operator running the leading company. TKWY saw EBITDA explode from 19m EUR to 128m EUR in the year to December 2020. Liefrando, TKWY’s German brand, has 26,000 restaurants, 12m active customers, and generated 2.5bn EUR GMV in 2020. Here is more of Delivery Hero’s statement:
By August, Delivery Hero will officially enter the German delivery scene with its full platform offering: from restaurant food to quick commerce, including Dmarts (small warehouses in the city center) and local shops...by running the logistics via a sizable fleet of couriers, local partners are provided with an advanced infrastructure that enables them to focus on their core capabilities. For local shops, Delivery Hero acts as a true digital partner, making it possible to access both offline and online customers
Delivery Hero believes the customer is underserved by Liefrando. This seems to be based on two core beliefs that drive DHER:
- customers deeply value convenience
- In the long run, customers will want one app for restaurant food, on-demand groceries and convenience
DHER believes it’s the duty of the platform to supply the infrastructure to serve customers with Friday night takeaways, groceries throughout the day, and anything from a convenience store whenever they wish. This is Generation 3 of food delivery: Generation 2 (logistics and marketplace) plus convenience delivery.
Related Content
Nimbus Kitchens, Roberta's Pizza & Ghost Kitchens
Cofounders of Nimbus Kitchens
Bechtle AG, Software Reselling, & White Label Food Delivery
Domino's Pizza: Managing the US and UK Franchise Network
Former Operations Director at Domino's Pizza Group and Former VP at Domino's Pizza
Grubhub Strategy versus UberEats and DoorDash
Former Director, Product at Grubhub
Copyright Notice
This document may not be reproduced, distributed, or transmitted in any form or by any means including resale of any part, unauthorised distribution to a third party or other electronic methods, without the prior written permission of IP 1 Ltd.
IP 1 Ltd, trading as In Practise (herein referred to as "IP") is a company registered in England and Wales and is not a registered investment advisor or broker-dealer, and is not licensed nor qualified to provide investment advice.
In Practise reserves all copyright, intellectual and other property rights in the Content. The information published in this transcript (“Content”) is for information purposes only and should not be used as the sole basis for making any investment decision. Information provided by IP is to be used as an educational tool and nothing in this Content shall be construed as an offer, recommendation or solicitation regarding any financial product, service or management of investments or securities.
© 2024 IP 1 Ltd. All rights reserved.