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DoorDash heads to Japan as food-delivery wars heat up

MarketWatch logo MarketWatch 6/9/2021 Lina Saigol
a person riding on the back of a bicycle: DoorDash is launching in Japan, one of the world's most restaurant-dense countries. © Michael M. Santiago/Getty Images DoorDash is launching in Japan, one of the world's most restaurant-dense countries.

DoorDash announced its official launch in Japan on Wednesday, marking the U.S. food-delivery company’s first market expansion in Asia and its third outside its home country, after Australia and Canada.


Video: Food Delivery Services Are Here to Stay: DoorDash CFO (Bloomberg)

Starting Wednesday, customers in Sendai, a city northeast of Tokyo, will be able to order from hundreds of local restaurants, as well as international chains including KFC Pizza Hut and Gusto, via the DoorDash app.

The move into Japan would allow it to tap into “one of the most restaurant-dense countries in the world,” DoorDash said in a statement on Wednesday.

Read: Watch out Uber and Just Eat, Delivery Hero has its sights on the lucrative German market

Major app delivery companies such as DoorDash Uber’s Uber Eats and Grubhub have been racing to expand into new markets, as they bet that demand for food-delivery services will continue, even as the pace of COVID-19 vaccinations picks up and restaurants begin to reopen after months of lockdown.

DoorDash, which is the biggest food-delivery company in the U.S. and is backed by SoftBank Group Corp will face competition in Japan from Uber Eats, which entered the market in 2016, and from Delivery Hero which launched its operations in the country in September last year.

Read: DoorDash stock enjoys best day since debut on optimism about post-pandemic prospects

Last month, DoorDash raised its full-year outlook for annual gross order volume, after posting better-than-expected first-quarter results. The San Francisco-based company, which has expanded into delivery from grocery and convenience stores, reported revenue of $1.08 billion for the three months through March, up from $362 million in the same quarter a year earlier, beating Wall Street’s forecast.

Shares of DoorDash have fallen 4.2% so far this year, while Grubhub stock is down more than 16% over the same period, according to FactSet.

In addition to the marketplace app, DoorDash is also offering Sendai merchants access to its Storefront product, an online ordering system that allows customers to place takeout and delivery orders directly with the restaurant. As part of its Japanese launch, Storefront will be commission-free until the end of the year, leaving payment-processing fees as the only cost to merchants, the company said.

a bicycle parked on the side of a building © Michael M. Santiago/Getty Images
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