Retail

Delivery Hero Faces Crowded Market

Food Delivery

The CEO of a German food delivery service is aiming to break even in 2018, despite competition from Amazon and Uber. Still, Delivery Hero’s Niklas Östberg said those companies could negatively impact his service’s bottom line, Reuters reported.

“It will be difficult for all the market players to survive,” Östberg told Reuters. “Everybody is fighting for size, because only then you have a chance. It will be hard to make any money as long as competition is as it is right now.”

While Delivery Hero claims to be the market leader in 35 of the 40 countries in which it operates, the service is competing with Takeaway.com in its home market. As a result, the CEO of Takeaway.com suggested a merger last month. Östberg said a deal was not immediately in the works, but the company was still open to “interesting” targets. Still, “we have the size that is necessary to sustain competition,” Östberg said.

Even so, many people download only a single food delivery app. While startups have to invest in marketing to promote their food delivery services, competitors such as Uber and Amazon can promote delivery services to their existing customers.

Uber itself is a force with which to be reckoned: Its Uber Eats, for example,operates worldwide in 29 countries and was on track to post more than $3 billion in gross sales by the end of 2017, The Financial Times has reported. The $3 billion gross sales figure is indicative of how rapidly the ridesharing company’s food delivery division has grown.

With 2 million drivers worldwide, Uber has access to a delivery infrastructure unavailable to competitors, with any given driver available to transport food or passengers in cities serviced by Uber Eats. The firm is reaping the benefits of its built-in delivery fleet, with Uber Eats orders comprising 8 to 10 percent of total ride bookings.

——————————

LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

TRENDING RIGHT NOW