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FoodPanda hot on untapped food delivery potential, cold on need to be 'super app'

ZDNet logo ZDNet 2/26/2021 Eileen Yu
a close up of a pink cake © ZDNet

FoodPanda believes there still are inroads to be made in the food delivery market, which potential remains largely untapped across Asia-Pacific. It hopes to do so not by building a "super app" like several of its contemporaries are doing, but by using technology to diversify services with "strategic" synergies. 

The Singapore-headquartered food delivery platform processes an average of seven to eight orders per customer per month, which can be considered high in the e-commerce realm. However, compare that to the multiple times individuals consume food each day, those figures are still low, according to FoodPanda's Asia-Pacific CEO Jakob Angele. 

The food delivery industry remained young, he said, with plenty of room for more innovation and technological advancements to take place. This development was especially critical for food aggregators and platforms such as FoodPanda, which operated on thin margins and without the luxury of overcharging for their services.  

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"So the question is how can we encourage customers to have more touchpoints with food, or FoodPanda, supported by technology," Angele said in a video call with ZDNet. 

Acquired by Berlin-based Delivery Hero in 2016, FoodPanda currently has presence in 12 Asian markets including Thailand, Hong Kong, the Philippines, and its latest addition Japan. 

It processed as many orders In the fourth quarter of 2020 alone as it did in all of 2019. This growth, no doubt, was fuelled in large by the global pandemic, which kept consumers mostly indoors. 

Angele declined to provide figures on how many active users the company has or the transaction volumes it processed each month. 

The desire to expand its customer touchpoints drove the company to introduce food pickup and grocery delivery options, the latter of which was fulfilled through its PandaMart service. Since the launch of the first store in Singapore in October 2019, there now are 150 PandaMarts in 40 cities across eight of its markets, including Taiwan, Bangladesh, and Pakistan, and the service is targeted to be available in all 12 markets by year-end. The grocery delivery service currently boasts an inventory of more than 5,000 grocery and household products, with a promise to deliver an order within 25 minutes. 

The company taps data analytics to determine how many PandaMarts a city needs based on variables, such as consumer density, and where to place them to optimise their reach, according to Angele. A city-state such as Singapore, for instance, may require up to 20. 

More recently, monthly subscription-based service PandaPro was introduced to offer various benefits including members-only deals and reduced delivery fees. Again, the CEO declined to provide subscription figures, noting only that the takeup rate was "encouraging" and members placed more orders than the average user. 

He added that more development was planned and new features would be added to the subscription service. 

PandaPro in Singapore is available at a promotional rate of SG$7.99 per month until April, after which it goes up to SG$14.99. The bulk of FoodPanda's revenue, though, still comes from its cut of each transaction processed. 

How much it collected from restaurants and F&B outlets differed by market, according to Angele, who declined to give details on what these were. 

He did note that while the COVID-19 outbreak helped drive orders on the food delivery platform, there were challenges initially as the team attempted to navigate the new landscape. For one, dine-in service was shut as Singapore entered into a partial lockdown during the early days of the pandemic as the nation worked to stem the spread. 

Restaurants faced difficulties staying in operation and had to decide if they should close or remain open only to cater to food deliveries, he recalled. Ensuring they could drum up sufficient business was the biggest concern for these F&B outlets, which needed the revenue to pay their suppliers and workers to stay open. 

FoodPanda's role here was to drive consumer demand and make it more affordable for these merchants to stay on the platform, he said, noting that the company then rolled out various initiatives including providing masks for delivery riders and waiving delivery fees to drive orders. 

It also had tools to quickly identify surges in demand so it could better manage its network of riders. In addition, restaurants could integrate their ordering system, so customer orders showed up as part of their internal order flow, as well as manage their own product listing with FoodPanda's platform.  

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Angele said several new features were in the pipeline to further support restaurants, adding that more details would be available when these were ready for launch. 

Super app term so overused

While coy on the company's product roadmap, the CEO was adamant that there were no plans to build a "super app" like some of its contemporaries such as Grab had done. 

Once just a ride-sharing service, Grab since has expanded its platform to be an "everyday super app"  from which consumers could access essential services they needed daily, including transport, food, logistics, messaging, mapping, and payments. 

Describing the term as "heavily overused". Angele stressed the importance of "smart diversification" through strategic synergies. This focus had prompted FoodPanda to include groceries and selected shops on its delivery platform, which he said was a natural extension to better support consumers who accessed its app in search of food. 

So rather than build an super app, much of the company's focus on product development this year would be on user experience. He noted that a large part of this for most food aggregators had been adapted from ride-sharing or e-commerce platforms. 

FoodPanda this year would be looking to make food ordering "more social and more engaging and more personalised", he said, adding that its users today still needed to choose and decide from a multitude of available food options. "It would be exciting to see [to what] point FoodPanda can better know what you want to eat today than you do yourself," he added. 

Much of this would rely on the many data points the platform collected and behavioural patterns patterns it analysed, Angele said. He said many customers placed more than 10 to 15 orders a month, showing clear order patterns, so the objective was to tap these and better understand what consumers wanted. 

He acknowledged there also were areas to improve and concerted efforts were being made here, such as improving interactions with customers who encountered issues with FoodPanda, he said. "We want to reduce the reasons they want to reach out to us, after all, when you order order, you want your food and not to talk to an agent," he noted. 

The focus here was to enable customers to be able to resolve any issue themselves, without needing to interact with a FoodPanda agent, as well as to improve the interaction where a customer would need to engage with an agent, he said. 

Angele also revealed that the company was open to potential acquisitions or partnerships that would help grow and strengthen its market footprint.

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