Delivery Hero to return to Germany as food delivery fight intensifies
Delivery Hero is relaunching in Germany, two years after selling its operations in its home country, in what is rapidly shifting from a food-delivery monopoly to one of Europe’s most competitive markets.
The Berlin-based company’s launch of restaurant and grocery delivery services this summer will put further pressure on what has historically been a lucrative source of profits for Just Eat Takeaway.com. The Amsterdam-based Just Eat group had, until recently, the market largely to itself after agreeing to buy Delivery Hero’s German business in late 2018.
“It’s a big market and we still feel like the [food delivery] service is sub-par,” said Niklas Ostberg, Delivery Hero’s chief executive.
Last month, Uber said it would roll out its Eats delivery service in Germany, after Finland’s Wolt arrived there earlier this year.
At the same time, Berlin has — alongside London — become a nexus of competition for several fast-growing start-ups offering rapid grocery delivery. Gorillas and Flink are both based in Berlin while Istanbul-based Getir, the largest European operator of rapid grocery apps, is planning to begin deliveries in Berlin this summer.
Delivery Hero has already deployed hundreds of its own “Dmarts” — small local warehouses dedicated to delivering groceries and other convenience items in as little as seven minutes — across the Middle East and Asia. “We don’t see anyone [else] combining that into one experience,” said Ostberg, by offering instant grocery delivery and restaurant food from within the same app.
He plans to use Berlin as a test bed, including trialling new restaurant concepts and so-called “cloud kitchens”, which prepare meals specifically for delivery.
After a “soft launch” in Berlin starting in June, Delivery Hero will begin to roll out across Germany under its Foodpanda brand from August.
Ostberg said the decision to relaunch in Germany was made only last month, following the expiry of a two-year non-compete agreement that was part of the €930m deal with Takeaway.com in 2018, and as other competitors were arriving.
“We don’t see necessarily that we are going to go in and win the market in the next year or so,” said Ostberg. “This is a 10-year game.” But, he added: “Of course we will definitely make sure we put in enough money to be the clear number two, the clear challenger [to Just Eat Takeaway.com].”
After news of the launch broke, Jitse Groen, chief executive of Just Eat Takeaway.com, said in a tweet: “Competition makes us stronger . . . We have defeated them in Holland, the UK, Poland, Ireland and Germany, and will gladly do so again.”