Foodpanda Leaving Japan Amid Increased Competition

German food delivery group Delivery Hero — which is perhaps best known for its Foodpanda brand in Asia — announced it was pulling out of the region because of increasing competition and a lack of drivers to fulfill customer orders, according to a Financial Times report Sunday (Jan. 2).

Delivery Hero and Foodpanda came to Japan in September 2020, but decided late last year that it couldn’t fend off the growing number of competitors across the region, so it instead decided to focus its resources on other regions.

Uber Technologies and local delivery service Demae-can, a Tokyo-listed company backed by the messaging app Line, remain the standouts in Japanese delivery, with Uber Eats holding 130,000 restaurants and other stores on its Japanese platform and Demae-can announcing late last year that it has hit the 100,000-store milestone.

Even with those lofty numbers, both Uber and Demae-can are looking to bulk up their partnerships across Japan, with the latter reporting a net loss of 20.6 billion yen ($179 million) for the fiscal year ending in August, in large part because of customer acquisition strategies.

Foodpanda hasn’t revealed how many restaurants are on its Japanese platform, but it’s likely far less than either Uber or Demae-can, FT reports. DoorDash’s entry into Japan in June and acquisition of Finland’s Wolt added another wrinkle to the ever-changing delivery wars.

Chinese ride-hailing service Didi Chuxing added a food delivery business in Osaka in 2020.

Related: Delivery Hero Leaves German Cities and Japan, Citing Competition, Driver Shortages

Delivery Hero announced in December that Foodpanda would pull out of six German cities — Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart — in addition to selling its Japanese service in the first quarter of 2022.

Delivery Hero will continue operations in central Berlin through an innovation hub to test new features and technology. The company is also pivoting to opportunities in quick commerce as well as other new markets and verticals.

Delivery Hero operates in about 50 countries in Asia, Europe, Latin America, the Middle East and North Africa and also works in quick commerce, aiming to deliver groceries and household goods in less than one hour and often in 10 to 15 minutes.