With Acquisition of Wolt, DoorDash Aims to Take on Uber Eats’ Global Reach

DoorDash continues to broaden the scope of its stated mission, this time with the acquisition of on-demand food and retail delivery service Wolt. Alongside the release of its third-quarter 2021 financial results on Tuesday (Nov. 9), DoorDash announced its roughly $8 billion deal with the Helsinki, Finland-based company, which operates its delivery service in 23 countries.

“We started in food delivery logistics, and our vision was always to build a platform that supports all of local commerce and to do it on a global basis,” DoorDash CEO Tony Xu told analysts on a call. “We believe these markets provide an opportunity to grow our international business to multiples of what it is today. This should allow us to invest and expand more efficiently than we could have done on our own, and on a faster timeline.”

While Xu states that this ambition has always been the vision, this mission is broader than the one the company stated on Monday (Nov. 8) when announcing the launch of its Nationwide Shipping feature: “to deliver the best of every local neighborhood.” This itself was already a vastly more expansive goal than the company’s original use case of restaurant meals on-demand.

While DoorDash is the clear winner in the U.S. in the intensely competitive on-demand meal delivery space, Uber Eats has far greater availability internationally, as does Grubhub parent Just Eat Takeaway. While DoorDash operates in the United States, Canada, Australia and Japan, Uber’s delivery service is available in 45 countries, and Just Eat Takeaway has a presence in 25 countries.

With their strong international presence, these competitors win out overall. Uber’s delivery business brings in $2.2 billion in revenues in Q3, well above DoorDash’s $1.3 billion. Just Eat Takeaway.com does not report revenues, but its Q3 gross transaction volume totaled about $7.9 billion. This acquisition will help the U.S. leader challenge these global giants.

Additionally, DoorDash has been growing not only to new markets in 2021, but also to new categories, adding clothing, cosmetics and other retail goods to the platform. Xu indicated plans to leverage Wolt’s expertise to further these ambitions, with the Finnish company already operating across categories.

“In certain markets, the company has already established a strong presence in categories ranging as far as cosmetics, and electronics,” Xu said. “As we look to grow our nonrestaurant categories globally, we expect their product vision and expertise will improve our execution.”

While consumer adoption of on-demand delivery options has grown enormously since pre-March 2020, shoppers still opt more often for buy now, get later (BNGL) options than for buy now, get now (BNGN) methods. Research from the September report “How We Shop: Brick and Mortar’s Role in the Bring-It-to-Me Economy,” a PYMNTS and Carat from Fiserv collaboration, which surveyed a census-balanced panel of more than 5,200 U.S. adults, finds that 91% of consumers make retail purchases from Amazon and 70% of consumers purchase from other nationally known online marketplaces, while only 52% of consumers purchase retail items from stores using online delivery aggregators.

Related news: 5K ‘Need It Now’ Consumers Tell PYMNTS What They Expect, Value Most From Retailers