Rocket Internet’s Foodpanda Is On The Road To Profitability In Southeast Asia

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Food Panda's Profitability

Food Panda’s riders. Source: Skyscrapercity.com

Rocket Internet’s food delivery startup, Foodpanda, is projected to make profit in most of its Southeast Asian markets reports Digital News Asia.

The company has presence in Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. It states Singapore as the key market in the region, but also states that other countries are catching up.

The startup also says that it grew 400% in terms of orders and revenue in 2015, but declined to provide any figures. Jakob Angele, Senior Vice President & CEO, Foodpanda Singapore

In 2016, Foodpanda is continuing to grow 25% month-on-month in orders and revenue, which is considered rapid growth for emerging markets.

Despite the positive outlook on Foodpanda’s growth potential and profitability, the startup is not without its hurdles.

The food delivery scene growth challenge

One of the biggest challenges is maintaining restaurant quality as new restaurants that join the platform are often overwhelmed by their Foodpanda orders in addition to their everyday customers in the establishments.

The Foodpanda team has taken initiative to screen the quality in order to maintain customer satisfaction.

Currently, Foodpanda fulfills 90% of all deliveries from the restaurants on its platform, this is a significant increase from 2015’s 60%. In Singapore, the startup has approximately 2,500 riders, but increased competition and labor shortage has made it tough on further recruitment.

The landscape food delivery startups in Southeast Asia is getting crowded, recent entries such as UK based Deliveroo have become key competitors for local players in the region. However, in Singapore, Foodpanda still claims its market leader position.

The main priority for Foodpanda is to maintain its path to profitability and concentrate on turning markets such as Thailand and Malaysia profitable as well.

This is good news for Rocket Internet as media speculation has been brewing regarding its companies’ profitability, following various news of possible M&A’s.

A version of this article appeared in Digital News Asia on July 5. Read the full version here.