Start with a Narrative Chapter on Background Information

Delivery Hero had been competing with Woowa in South Korea, so the deal puts an end to that rivalry, serving both sides. Details of the deal are still under review by South Korea’s antitrust regulator, however, and the companies plan to continue operating both apps separately.

But Southeast Asia is a different story—a challenge Woowa’s co-founder and CEO Kim Bong-jin, put in charge of the joint Woowa-Delivery Hero Asia operations, has to solve.

The 5 Things You Must Know To Eat At East Asia

Woowa’s Vietnam business is still struggling. And in a convoluted way, it has ended up with the remnants of Foodpanda’s Vietnam unit. Woowa had acquired the company that acquired Foodpanda’s Vietnam business in 2016. Despite new management, the delivery app lost out to local competitor Foody, industry insiders told us.

And then there are Grab and Gojek, each jostling for a share in the country’s competitive landscape.

Profitable operations in Korea, an experienced executive, and a foot in the door in Vietnam make Woowa an attractive partner for Delivery Hero’s plans, but it has much to prove in Asia’s emerging economies. For example, Foodpanda and Woowa’s combined footprint across Southeast Asia now extends across most key markets, except its most populous one, Indonesia. The country’s online food delivery sector is firmly in the hands of a Gojek versus Grab duopoly and remains a blind spot for Delivery Hero after Foodpanda ceased operations there in 2016.

It seems unlikely that Foodpanda would make another attempt at conquering the region’s biggest market. However, Foodpanda’s CEO Jakob Sebastian Angele told us he is “open to reconsidering” as the firm plans to “expand aggressively.”

Three’s a crowd

Three’s a crowd

The three big delivery platforms—Foodpanda, Grab, and Gojek—are all in the same boat in Southeast Asia. They are all still loss-making.

The current phase of food delivery development in the region is all about deploying technology such as AI recommendation engines, smart routing, and order batching, as well as cloud kitchens, to reach a degree of efficiency that will allow delivery companies to operate profitably.

It’s especially tricky in price-sensitive markets where average order sizes are small. In order to make delivering $2 meals profitable for restaurants, delivery people, and platforms, all parts of the chain must work with optimum cost-efficiency. Order volumes need to be high too.

Complicating that challenge is the diverse nature of the Southeast Asian market, where every country is different and any aspirant to market leadership needs to quickly adapt to idiosyncrasies in local infrastructure, modes of transportation, payment channels, and consumer habits.

That’s where Foodpanda lost out in its early days.

It kept its IT team centralised in Europe. And the firm couldn’t adapt to the changing market conditions, former employees said. Its situation became especially apparent in Indonesia, where food delivery had taken an unusual twist with the launch of Gojek’s app in 2015.

“I officially announce Foodpanda’s decision to cease all food activities in Indonesia on a permanent basis.”