Last week on the 3rd of October, Foodpanda Indonesia delivered their last order and closed their doors. Many would have seen this coming from the time it was announced that Foodpanda Indonesia was up for sale three months ago, and yet failed to find any buyers.
Multiple analysts and sources agree that it was the rising competition of other food delivery services that caused the downfall of this Foodpanda in Indonesia.
To be precise, some of the reasons commonly cited for the collapse are:
1. A saturation of strong competitors with an insight into the local market, large networks of drivers and competitive pricing, particularly local startup Go-Jek, and GrabFood.
2. The close-range delivery model limited the options for users, making them turn to other providers for alternatives.
3. A lack of flexibility in restaurant options, unlike their competitors who allowed users to choose food from any restaurant rather than just restaurant partners.
4. A shift towards a corporate focus, leaving them less relevant to average users. In order to differentiate themselves, Foodpanda Indonesia had been trying to get more B2B clients, rather than work on B2C.
5. Lack of resources to deal with the traffic and poor infrastructure in Jakarta, which led to slower delivery times and unhappy customers. Again, Go-Jek with its larger fleet of drivers was able to trump them here, drawing the customers away.
We reached out to Yannick Skop, the managing director of Foodpanda Malaysia for his thoughts on the shutdown and also to get an indication if the Malaysian side faces similar problems.
Yannick declined to comment about the problems the Indonesia team faced, saying, “I cannot provide much detail beside the statement from our global CEO to other news outlets: ‘Indonesia has not generated the same momentum and represents a much smaller opportunity for our adapted proposition. We will continue to invest into our Asian businesses and are very happy about the past results.’”
Speaking about the challenges faced compared to Indonesia, he said, “The online food delivery market in Malaysia is very different from Indonesia, so many of the market challenges our Indonesian team faced are not impacting us. We are very happy with our progress here as the #1 food delivery destination for Malaysians.”
He went on to describe Malaysia’s food culture as unique and special, with a population that has a diverse palate. It’s also no secret that most Malaysians are extremely passionate about their food. This leads to high expectations for ordering food delivery, which Yannick considers a “nice challenge to overcome”. He explained, “Our approach is very simple: 1) we have a very strong selection of 800+ restaurant partners to choose from; 2) we deliver food in less than 40 minutes on average; 3) we keep our fees to an affordable level at RM5 per order and no service fees.”
According to him, although Foodpanda has been in Malaysia for over four years, they are still experiencing very fast growth rates. He said, “We are able to service thousands of orders per day with fast delivery times, strong customer satisfaction and healthy unit economics.”
It remains to be seen if Foodpanda Malaysia really does have such a good outlook in the near future.
After all, we’re also seeing the rise of Malaysian startups edging in on the food delivery market, such as RunningMan and MobileWaiter. Compared to these smaller businesses, at the moment Foodpanda Malaysia certainly has the advantage of covering more ground and having an extensive network of partnered restaurants.
However, we have yet to see other multinational delivery giants such as Deliveroo, UberEats or even GrabFood venture into our country. If Uber and Grab take a dip into food delivery in Malaysia, they won’t be starting from zero, having already established their brands here. The story might be very different for Foodpanda if that happens.
Feature image compiled from brandtechmania.files.wordpress.com and The Star.