We are stuck in our homes but with the shelves of our kitchens full of food.
Throughout the lockdown, online food delivery has suited itself to become the sole life-line that many of us have come to rely and depend on. Even as the world slowly attempts to rise from the ashes of many lockdown phases, people still prefer to order food online to prevent stepping outside to dine. Delivery Hero is one company that has seen a plummeting growth because of this shift in consumer behaviour.
Founded in 2011 in Berlin by Niklas Östberg (“Östberg”), Kolja Hebenstreit, Markus Fuhrmann, Claude Ritter and Lukasz Gadowski, the company has since seen unprecedented growth into a massive team of 25,000 employees, incubating around 1.5K employees in their Berlin HQ alone. They are currently the world’s leading local delivery platform bringing food, groceries, medical supplies, electronics and other household goods to customers wherever and whenever they need them. However, food remains the core focus. With more than 300,000 restaurant partners, processing 10 millions orders every month and operating in more than 40 countries across Asia, Europe, Middle East and America, it remains the largest food network in the world – outside China.
Funding
With seed capital raised in 2010,amounting to almost €30 million, the company has now embarked on a series of acquisitions to consolidate its brand internationally. To date, this Germany company has raised around €4.3 billion in 16 rounds of funding. Today Delivery Hero is listed on the Frankfurt stock exchange and was part of the leading index DAX (Deutscher Aktienindex) in 2020.
Business Model
Customer Segments
Delivery Hero caters to a simple psychological appeal – they promise to buy us time and save us effort. Hungry customers can order and pay for food delivered in seconds or even choose a delivery time that suits them. Not only do these heroes connect restaurants and vendors, their fleet of fantastic riders have made it their mission to make your lives easier.
As such, the heroes in this company have more than one segment to care about to keep them looking ‘hot and sizzling’ – let’s take a look.
Partner ecosystem
With its presence in 99 markets across four continents – Europe, Middle East, Asia Pacific and the Americas- Delivery Hero continues to connect the ecosystem of both general customers and restaurants. The marketplace offers around 300,00 restaurants worldwide – comprising small and medium-sized local businesses that wish to explore the lucrative online consumer base.
Value Propositions
Delivery Hero acts as a platform that connects its customers with restaurants, grocery shops, flower shops etc. Customers can flick through menus in a simple-easy to use interface and receive a range of offers and discounts. They more than deliver convenience across every customer touch points – decision-making, accessibility, transaction and personalization. Both restaurants and customers also benefit with dedicated delivery menus, synchronized menus and the visibility to optimized delivery time estimates through its app.
Channels
Delivery Hero operates through its subsidiary companies across 33 markets, under the umbrella of Hungry House in the UK, Lieferheld in Germany, Pizza Portal in Poland and Foodik in Russia. These brands operate through their own websites and mobile apps. The company has adopted an approach sustained on global knowledge exchange and works seamlessly across their brands and countries with best in class technology and services.
Revenue Streams
Delivery Hero levies a fee from partner restaurants which includes a one time set-up fee, a monthly subscription fee to keep its subscription running through its platform and also a commission from every order placed on its app. In the UK, one of Delivery Hero’s core markets, these fees amount to a reported £499 set-up fee, a monthly £14.90 subscription fee and 14% commission on all orders. (Source : https://www.cleverism.com/company/delivery-hero/)
Key Partners
Delivery Hero partners with more than 200,00 local vendors and operates more than 100 Dmarts (local warehouses or cloud stores) to enable product variety and last mile delivery.
Complementing these partnerships, Delivery Hero also collaborates with delivery service providers, tech companies and marketing affiliates.
Mergers and Acquisitions
The Company started its aggressive acquisition strategy in Australia, Mexico and Russia, followed by acquisitions in Germany and the UK, which remains the company’s largest markets. To further its growth, Delivery Hero began its acquisition push in Europe in 2012, in Asia in 2013 and entered Latin America in 2014.
Recently, Delivery Hero has emerged as one of the biggest acquirers of technology start ups in the Middle East region. The company is reported to have spent around $1.2 billion in the ME from 2015 to 2020. Instashop was remarked as one of most interesting acquisitions in the Middle East region earmarking its entry into the grocery delivery space in this region.
Delivery Hero has also partnered with Food Panda, following a recent shuffle of cards in the online delivery market in Europe, backed by German e-commerce giant Rocket Internet.
By providing a simple, centralized easy to use platform where you can order your local favourite food, customers not only experience convenience at their finger tip but also are more likely to order again- and again. It’s a win-win for all!
YRC is empowering retailers and online grocery providers to scale and optimize their delivery operations during these uncertain times. Your Retail Coach (YRC) helps retail businesses with their web store and online marketplace sales management strategies and practices with a focus on developing brand awareness. YRC assists retail businesses in managing their supply chain via services and support in warehouse management, procurement, inventory management, dispatch and team management riding on proven models of logistics and use of technology.If you aim to develop a top notch, on-demand food delivery service like Delivery Hero, do contact us. With our years of experience and consulting practise, we can help define and refine your strategy, giving you a competitive edge in the midst of disruption.