Southeast Asia was foodpanda's launch pad. Now the meal-delivery service is global
Since online food-delivery service foodpanda was launched in Thailand in 2012, foodies have become spoiled rotten. Just a few clicks and you can get a meal from leading restaurants delivered to your doorstep at no surcharge. Heck, you can even order food in literally 10 seconds from its mobile application that runs on both iOS and Android.
Offering convenience, user-friendly interface and an extensive choice of restaurants, foodpanda has expanded to 41 countries in two years, becoming the German e-commerce venture capital firm Rocket Internet’s fastest-growing venture, among many others, including Zalora, Lazada and Easy Taxi.
In Bangkok foodpanda lists more than 250 restaurants and has services in Chiang Mai and Pattaya and plans to add Hua Hin – and all the major Thai cities – in the near future.
Berlin-based Ralf Wenzel, foodpanda’s co-founder and global CEO, was in town earlier this week to chat with us about his insights and grand business scheme.
How do you run such a colossal business?
We do the product and platform centrally, and the system automation we do from Berlin. Of course, the local execution, such as the sales, communication, marketing and all that, has to be done locally. We maintain system automation in Berlin and execute local expertise everywhere we expand to, and I think that makes us very successful. We’re a local and a global company, in a sense.
How did you come up with the concept?
When we started doing this business, we were thinking that every single country in the world has restaurants, people that are interested in restaurants, people that are going to restaurants and restaurants that are doing delivery.
This market has existed for centuries, actually, and it’s always been offline. Now there are millions of restaurants all around the world producing leaflets or brochures they distribute in their restaurants or in the streets. It’s a costly process, though, and they can’t track what’s happening.
At the same time we saw a switch in behaviour, driven by technology and economic growth, and the Internet has penetrated in every single country. Smartphone penetration is growing. We knew people would change their behaviour when it comes to ordering food, too. We’re not actually inventing a new business – we moved food delivery from offline to online, which is more transparent and convenient. We started foodpanda two years ago, started in Singapore and then Thailand.
How was the feedback when you first launched?
It worked because people liked that we made ordering food easier. We’ve seen it grow like no other businesses. So we decided to take the business out of Asia to other countries.
Why did you begin in Asia?
We saw in our first market studies that there was a strong food-delivery market in Asia. Everywhere in the world there is food culture, but in Asia it’s not just about quality but also convenience. Asians like it fast and convenient, so there’s a need for food delivery to be convenient. It was the right step for us, and for our business, because Asia is the fastest-growing region.
What’s the most challenging part of the operation?
The interesting thing about this business is that it’s not just putting restaurants on the website and waiting for people to order. The product we built is very complicated, because ordering food is something very local. So we defined very carefully every restaurant in our delivery area because we wanted no disappointments. We wanted to make sure the food arrives within a specific timeframe. Every city is different, as are local logistics, and we really have to localise the service well.
How do you process orders?
We invented our own application that we install on the restaurants’ computers. It allows automatic transfer from the customers. We also have printers with SIM cards for restaurants that don’t have Internet access – they just plug it in to get orders directly from customers. We want it to be automated and convenient for the restaurants to receive the orders as well. We invested a lot of time, money and effort in the technology. The website might look simple, but there’s a lot of effort behind it. In some countries, including Thailand, we also complement the food ordering with our own logistics. We have our own system and drivers that work with us.
How do you pick the restaurants?
First we choose the big brands and then we look for the “small treasures” that might not be well known as a brand but have excellent food. Every country we have a team doing the research and sometimes they visit the restaurants to check on the quality. We call them the treasure hunters. But at the end of the day, it’s the customers that judge the restaurants, so we always encourage the customers to leave a comment and rate the restaurants.
Would you drop a restaurant if it were poorly rated?
We work closely with the restaurants and we share both positive and negative feedback with them. If a restaurant is constantly failing we would have to drop it to protect the customers. Fortunately we haven’t had that situation so far because we have pretty decent selection process.
You’ve just partnered with Open Rice.
Open Rice is a complementary partnership. It’s a restaurant-recommendation site and they know the market really well. They’ve researched the markets for many years. They give access to the information about the restaurants, while we generate the food orders and delivery. Open Rice allows the customers to have even more comprehensive reviews of the restaurants that are listed on foodpanda. Customers of Open Rice, in turn, can order from the reviewed restaurants via foodpanda.
How do you see the Thai market’s future?
It has a strong channel switch. In Europe they switched from offline to the Web and then mobile, but in Thailand it went directly from offline to mobile, which creates a very different dynamic. The majority of orders for us here come through mobile. Soon people might not order from the Web or mobile but from interactive TV and PlayStation. We’re following these trends, and we’ll be maintaining our vision that the customers will always think of foodpanda first. We want to be “the Facebook of food”.
Why a panda?
Pandas are very friendly animals – and they are always hungry!
Gobble it up
Find out more about the service at www.foodpanda.co.th.