In Germany, the food delivery space is growing more competitive. Weeks after the Financial Times reported that Uber Eats is launching in the “strategically important country,” placing its service in competition with Netherlands-based delivery service Just Eat Takeaway.com’s “monopolistic” lead in the country, Berlin-based delivery service Delivery Hero told Reuters that it was relaunching in Germany, years after selling its German delivery service to Just Eat Takeaway.com for $1.1 billion in December of 2018. Amid these two major entries into the space, the incumbent, Just Eat Takeaway.com, told Reuters that it was broadening the scope of Lieferando.de, the name under which the company operates in Germany, to include grocery delivery.
As if not enough were happening here, in addition to being a competitor of Delivery Hero and in addition to having acquired its German business, Just Eat Takeaway.com has one more important relationship to the Berlin-based delivery service — the two are currently in arbitration with the International Chamber of Commerce concerning Delivery Hero’s Just Eat Takeway.com shares. The company revealed in its SEC prospectus concerning its acquisition of Grubhub, published Wednesday (May 12), that the arbitration proceedings initiated in March of 2020 alleging that Delivery Hero “has failed to comply with its standstill,” which “constitutes a breach of the Relationship Agreement,” are ongoing.
Delivery Hero’s German launch, which the company will undertake through its Foodpanda brand, will begin in Berlin in June, promising city residents ultra-fast order fulfillment, with delivery times as short as seven minutes, and will spread throughout Germany later in the summer. As Delivery Hero CEO and co-founder Niklas Oestberg told Reuters, “We might have a product good enough for challenging for number one (spot) in the very long term — that’s our logic.”
Amid other related Twitter outbursts, Just Eat Takeaway.com CEO Jitse Groen has also been tweeting taunts to Delivery Hero, writing “Competition makes us stronger. Last time DH tried, it cost them eight years, a takeover of the then-no 1 and ca. 500m Euro to become less than a quarter of our current German size. We have defeated them in Holland, the UK, Poland, Ireland and Germany, and will gladly do so again.”
Groen had previously tweeted at Uber CEO Dara Khosrowshahi, following the news of Uber Eats’ German launch, “Interesting way of trying to depress our share price @dkhos .Now, when did I see that before? ”
According to German market and consumer data company Statista, the German online food delivery market is expected to reach $2.7 billion this year, growing 5.9 percent year over year, with 25 percent user penetration. In 2019, United Kingdom-based delivery service Deliveroo shut down its operations in Germany, unable to hold its own against competitors.
Of its expansion into grocery, Just Eat Takeaway.com said in a statement that it “intends to run its grocery business at gross profit neutral.” This suggests that addition of grocery is less a move to drive sales and more a move to embed its platform further into German consumers’ daily routines, developing a deeper relationship with customers that might encourage them to opt for Lieferando.de above competitors when placing a restaurant order.
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May 13, 2021 at 07:42PM