Delivery Hero, the German on-demand delivery company, is taking its food delivery service out of Germany once more. At the same time, it has stated that it would quit the Japanese market in Q1 of next year by divesting Foodpanda Japan.
Niklas stberg, the company’s CEO and co-founder, stated in a statement accompanying the pre-Christmas exit news, “Scaling down our activities in Germany and intending to liquidate our Japanese business have not been simple decisions.” With a completely different reality now than when we first entered these areas, we must explore alternative growth possibilities with more promise with a sad heart.
“Despite having built up two outstanding foodpanda teams that are making amazing progress, creating meaningful value for our ecosystem in both nations has become tougher.” For the accomplishments, both teams have made in the previous several months, I have nothing but appreciation and admiration.
I’m really proud of the incredible service they developed from the ground up, and we’ll do everything we can to help our fellow Heroes on their path ahead.” Following a few weeks of testing, the European on-demand delivery behemoth only fully returned to its home market — under the Foodpanda name — in August.
In an interview with the Financial Times in May, when it was behind the Germany relaunch, Ostberg talked of being in it for the long haul, telling the newspaper: “We don’t think definitely that we are going to go in and win the market in the next year or two.” It’s a ten-year game.” And, as recently as last month, Delivery Hero was still growing Foodpanda’s footprint in Germany, announcing the service’s entry into six new cities, with the division’s CEO, Artur Schreiber, praising “excellent” demand and an expansion that he claimed would generate “a thousand” jobs.
Although that statement also signaled that it could be having difficulties keeping consumers – Delivery Hero said it would be renewing Foodpanda’s identity, creating a new app with an improved user experience, and extending a reward program, among other things. In the end, it is shutting down a commercial delivery service in Germany, leaving just a Berlin-based R&D center where it claims it will test new services and features, so it seems like it will keep doing some (trial) deliveries in Central Berlin for personnel working on new product development.
It is worth noting that it is not selling the Foodpanda Germany subsidiary to a competitor, as it did last year when it shut down the market. Either delivery Hero wants to keep the possibility of a quick return in the future; or— perhaps more likely— the local food delivery market is so competitively tapped out that, there was little to gain by selling the unit. unlike a few years ago when it was able to rake in a tidy sum of $1.1 billion when it sold its German operations to Dutch rival Takeaway.com; which, incidentally, has since merged with U.K.-based Just Eat and the combined entity is building out.