Lockdown helps foodpanda take 70% market share

FACEBOOK.COM/ FOODPANDAPHILIPPINES

By Jenina P. Ibanez, Reporter

ONLINE delivery service foodpanda Philippines has reached an estimated 70% market share among food delivery mobile apps in the country after demand surged last year, a company official said.

“Suddenly, everyone was locked down, and no one could go out. If you wanted food, you only only really had two to three services you could choose from at the time,” Daniel Marogy, foodpanda managing director, said in an online interview.

The company’s user base grew by eight times from the figure in February last year, after the lockdown led to a surge in demand for delivery services. Its restaurant partners increased by five times and its order count went up by 12 times, Mr. Marogy added.

Bigger market share swung to foodpanda during the lockdown last year, he said, noting that its competitor held more than two-thirds of the pre-lockdown market.

“Because the demand coursing through the main incumbent at the time was so high, it became difficult for them to manage that volume, which caused a large spillover effect into their competitors, the largest of which was us,” he said.

foodpanda, he said, was able to retain the new customers as it had been improving delivery times and assortment of restaurants in the months preceding the lockdown.

App-based food delivery services in the Philippines are offered by companies like Grab Philippines and DBDOYC, Inc. (Angkas). Lalamove Philippines stopped its food delivery business in February.

Mr. Marogy said that market share in the delivery industry could change quickly.

“We’re very, very careful of not just relying on the same sort of approach and business model to sustain our growth into the future,” he said.

This year, foodpanda plans to expand its grocery delivery service, doubling its dozen small warehouses in Metro Manila in the second quarter, with potential further expansion in the second half.

Mr. Marogy said that the company’s grocery service is based on small warehouses close to customers, with around 3,000 to 4,000 goods compared to the 50,000 products in a supermarket.

“If you want a smaller selection but you want it on demand, then our model would be ideal,” he said. “Our focus will really be on the speed element, the quick commerce elements because that really complements our business and our assets, the main one of which is the rider fleet.”

He said that the company’s rider count increased by four times since the start of the lockdown, noting that he does not expect the headcount to shrink even after lockdown restrictions are eased and more people dine in.

“Despite the pandemic, [food delivery services] don’t take more than 12% of total food services, so in terms of the secular trend that will continue over many, many years, there’s an enormous amount of way to go,” he said.

“So I think if we were currently at 80% then suddenly the market opened up for dine in, sure I mean most likely you’d see that fall. But the fact that the penetration is so low at the moment, and there’s such a long way to go until the space is saturated, then I don’t see too much risk on that side,” he added.

foodpanda plans to increase its Philippine markets this year to 150 from just over 100. The Berlin-based company launched its services in the country in 2014.

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