Delivery Hero wants to be active again in Germany

First Delivery Hero withdrew from the delivery service business Germany back - now the Dax group is opening up it again and wants to dominate it right away. A good two and a half years after the sale of its Germany division to competitor Just Eat Takeaway.com, the food delivery service Delivery Hero is planning to recapture the domestic market.

Starting in June, the Foodpanda brand will initially be available in Berlin The company, which is active in more than 50 countries, announced that it supplies restaurant food as well as groceries and other supermarket products.

"We will not only offer the restaurant delivery of food," said company boss Niklas Östberg of the "Süddeutsche Zeitung«. “We'll also deliver everything else, from food to shoes to pharmaceutical products. Everything that the shops in the immediate vicinity offer. «After the official start on August 10, the company says the offer will be expanded to other cities.

Small but central warehouse for fast delivery

In the time of Delivery Hero's absence, the Lieferando owner Takeaway.com has established itself as an industry leader in Germany. From January to March, the number of orders rose by 77 percent to 39,2 million in view of the closed restaurants in this country. Food delivery services, but also the rapidly growing delivery start-ups such as Gorillas or Flink, are benefiting from the increasing popularity of online platforms during the corona crisis.

With regard to the Dutch company Takeaway.com, Delivery Hero boss Östberg said: "We assume that we can offer a product with which we can challenge number one in the long term."

Delivery Hero no longer only has to compete with Just Eat Takeaway.com, but also with gorillas, for example. This start-up only raised 244 million euros from investors in March and advertises deliveries within ten minutes.

Östberg wants to top that. He promises seven minutes - between ordering and delivery.

Cut-throat competition with wafer-thin margins

In order to achieve this, Delivery Hero also wants to build so-called Dmarts - small warehouses in the city center - in Germany. The company, which was founded in 2011 and has been represented in the German leading index Dax since last summer, already operates a network of 600 Dmarts around the world. Delivery Hero also wants to enter into partnerships with local businesses, open restaurants that only deliver and is also considering memberships.

In view of the high investments, Delivery Hero writes for many quarters in the red: despite strong sales growth and countless new customers in the corona crisis. The start of Germany is unlikely to change that, even if Östberg initially does not want to provide any information on the investments: “We are assuming that we will not make a profit in Germany for years. We expect an investment period of 10 to 15 years to get to the top. "The margins in the business are" wafer-thin ".

At the same time, Östberg assumes that the competition will decrease over time. "There will be winners and losers for sure." There will be little consolidation in the first two or three years, but after that there will be a wave.

In the past, Just Eat Takeaway was particularly noticeable in the food delivery industry with takeovers. Shortly before the outbreak of the corona crisis, the Dutch took over British competitor Just Eat for $ 7,8 billion. Now they're targeting the $ 7,3 billion takeover of Grubhub United States