Case Study Foodpanda- the Amazon of food ordering in emerging markets.

Rocket Internet, the tech startup incubator, was founded in Berlin in 2007 by three brothers:
Marc, Oliver and Alexander Samwer. One of the most recognized web services from Rocket
Internet is meal delivery site Foodpanda, which was founded in 2012. Foodpanda’s other
investors include Rocket Internet, Phenomen Ventures, Investment AB Kinnevik and iMENA
Holdings. In 2015, Foodpanda is active in over 580 cities around the world, gets 150,000 unique
visitors every day growing, operating in 12 of the largest 20 metropolises, and partnering with
over 60,000 restaurants.

Foodpanda’s Mission:
The mission of Foodpanda is to give its customers the perfect mix of traditional cuisines from all
over the world. Its partners will be happy to delivery their best pizza delivery, sushi delivery,
Indian cuisine, Chinese food, Greek cuisine and many more. Customers can choose
Mediterranean, Japanese, Healthy, Vegetarian or Vegan cuisine and you can order your most
loved desserts and cakes. It was never so easy to get a dessert a few clicks away and the most
hard to make cake will be at customer’s door. Foodpanda not only to give customers the best
choice of meals, but also to make it fast, easy and convenient. Customer’s food delivery is just a
few clicks away, while they are relaxing and having fun with your friends and family. They can
order their favorite meal at their doorstep and enjoy the food. Foodpanda recommends: Indian
restaurant Kohinoor, pizza Biju,Pizza Verona,Cosa Nostra,Sushito BG,Pizza Siciliana,Bar
Nine,Pizza Palace,Sofistar, pizza restaurant Primavera,Picc adilly(Ruse), restaurant Dragoman
(Var na),La Strada (Ruse)Terms and Conditions.

Foodpanda’s specific mission is to serve people a sumptuous meal without any hassle. It intends
on making food delivery an easy and convenient option for all food lovers.

Foodpanda’s Revenue mode

Revenue comes to Foodpanda by enabling restaurants to bring their menus online and extend
their customer base. Using analysis and user generated recommendations Foodpanda helps
restaurants increase sale. Some other revenue sources are affiliate commission, delivery charges,
sponsorship and advertisement etc. The revenue modes of Foodpanda are given below-
 1. Commission from participatory restaurants: The main source of Foodpanda’s revenue
comes from the commission of listed restaurants. (Arpita Arora, Internet marketing
analyst).
2. Delivery charges: Foodpanda earns 40% of its revenue from delivery business according
to Saurabh Kochar, CEO of Foodpanda India.
3. Advertising: Foodpanda earns 10% profit from display ads which is connected with
CPM. Normally it charges advertisement fee for-
a. Page served.
b. Ads unit served per page.
c. Redirecting to pages.
4. Order charges: Foodpanda generates revenue from ordering charges. When an order
placed through the website of Foodpanda, it gets 5-10% of the total prices of ordered
foods.
5. Selling customer habits information: Foodpanda, one of the biggest food delivering
service provider, sells customers habits to the market researchers. It is another source of
its revenue.

These are the main sources or modes of Foodpanda’s revenue.

Proposition of Foodpanda

Core Proposition: The core value proposition of Foodpanda is ensuring customer delight at
every point in the food delivery process. The key message, ‘If Foodpanda likes it, you will love
it’ spells out the fact that anything one orders through the portal has already been screened
through stringent yardsticks of quality to ensure maximum satisfaction. Foodpanda promises to
put every delivery to the 'panda-test'. That means foodpanda ensures quality of food and delivery
of food within right times by their own management.

Some other propositions of Foodpanda

 The cancellation of order can be possible. Cancelation depends on the restaurant one
places the order with. Give them a call and they will help to cancel order.
 One can order from more than one restaurant but unfortunately unable to combine the
orders. Each order must be made and paid for separately.
 The customer will receive a confirmation email from foodpanda, stating the orders they
have selected and the time it will take to be delivered to. Foodpanda will also send a SMS
to keep updated once the restaurant has confirmed order.
 When the receiver is not at home he will receive a confirmation email and a SMS from,
stating the delivery time of order so one will be able to arrange for someone to be home
when the delivery man comes by. Unfortunately, redelivery is not possible.
  If for any reason one is due a refund from foodpanda, the money will be credited back to
them within 3-5 working days from the processing date.
 One can search for Halal restaurants and browse the Halal menus on foodpanda’s
website.

Competitors:
HungryNaki is the main competitor of foodpanda in Bangladesh. Basically both foodpanda and
HungryNaki are aims at delivering the food from the desired restaurant. We can see that
hungryNaki is becoming the main competitor of foodpanda and its aim is also provideing people
with food from their favorite restaurants without having to fight through traffic, bad weather or
wait in queue. They also cater to the lazy ones who never wish to leave their abodes. They make
more than 100 deliveries each day and the number is only increasing. It is an e-commerce
website, which delivers food from restaurants to your doorstep and it’s all just a click away.
Foodpanda is giving a good fight back. HungryNaki is a Bangladeshi business entity whereas
foodpanda is a global server. Here we can say that foodpanda have lots of experience to face the
competition. Another competitor of foodpanda is Delivery Hero which is a Berlin based startup
that operates in almost 14 countries. Delivery Hero has raised around 200 million to date and
claims it has 6 million customers, 55000 restaurants, and 500 million in annual sales in last year.
Another competitor of food panda is Just Eat which is UK based.

Foodpanda made Merger with other competitors in Asian market to remove competition. In
Asian market it makes merger with various competitors.

Expands leadership in India, Malaysia, Singapore, Philippines, Pakistan, Hong Kong, and
Thailand

• In India, acquisition of JUST EAT India, expanding leadership in biggest food

delivery market after acquiring TastyKhana in November
• In Malaysia and Singapore, acquisition of Room Service, a brand of Food Runner
• In Philippines, acquisition of City Delivery, also brand of Food Runner
• In Pakistan, acquisition of EatOye
• In Hong Kong, acquisition of Koziness
• In Thailand, foodpanda enters partnership with Food By Phone

Objectives and Strategies:

Foodpanda’s overall aim is to deliver food to the ends of the Earth before its rivals get there.
More objectives are discussed below in details:
Procurement -acquiring business for accessing a wider customer base, diversification of the
products, services and reducing competition.
Becoming a Market Leader- increasing market share so that it may become market leader of
online food ordering business.
Awareness- increasing awareness of new food brands by 20% in next 6 months.
Encouragement- encouraging customers who haven’t ordered from Food panda recently.
Foodpanda is currently the most globally prominent online marketplace for food delivery, active and
rising in Asia, Europe, Latin America, the Middle East and Africa. By the end of this fiscal, Foodpanda
aims to have a market share of up to 10 per cent of the food-ordering market. The market place growth of
Foodpanda is driven by expanding its services into eight more countries including:

• • Croatia, • • Tanzania
• • Bulgaria • • Uganda
• • Serbia • • Kazakhstan
• • Slovenia • • Azerbaijan

Food Panda’s growth strategy:

The growth strategies for Foodpanda include the following:
• to build qualified and skilled teams
• To collect data on all levels
• To use scalable technologies right from the beginning
• To maximized focus on efficient marketing

Having acquired the trust from experienced investors it will be able to continue its growth
strategy to become a truly global internet brand. Foodpanda takes over Delivery Hero’s
TastyKhana in India, which was started in 2007.Besides this it also acquired the Mexican food
delivery businesses PedidosYa, SeMeAntoja and Superantojo .These acquisitions allow
Foodpanda to extend its market leadership in India and improve strong position in Mexico. So, in
this way it will push its expansion within the existing markets, to gain presence at every corner
of every country they are active in.

It focuses on creating new entrepreneurs as a new CEO in every market it’s in – the way Rocket
Internet does it. Now they’re in 40 markets. They can learn much faster from each other. So its
model is to have an entrepreneur sitting in a country using global standards that they can share to
improve that market.

According to Ralf Wenzel, CEO and Co-founder of Foodpanda, over 90 percent of the food
ordering market is still offline. That means customers prefer making phone calls to place orders.
Wenzel says that changing user behavior is a core thing that both Foodpanda and its competitors
should focus on.

Risk Management of Foodpanda:

The Foodpanda is facing a number of challenges where they can take development initiatives for
managing their risk well and making the business more profitable and competitive in future.
Some major challenges faced by the Foodpanda are as follows:

False Notification System: Foodpanda often shows the restaurant active while they are already
closed (particularly at night) and takes the order and after making the customer waiting for a
while they apologize for their mistakes which is really annoying. More amazingly they often
offer a free voucher for the ordered amount for taking the food from another restaurant so that
the customer is not dissatisfied!

Lose of Transaction: Sometime foodpanda loses the record of transaction. In May 2015 one of
the chain restaurants in Mumbai angrily cut off the contact with Foodpanda as it was not paying
a bill of 1.5 lakh rupees saying that it has no such record of transaction. Often it is also heard that
Foodpanda makes no response after taking the order and does not notify the restaurant regarding
the cancellation of order.

Laws and Regulations: Foopanda needs to face differentiated rules and regulation in different
countries. Many countries patronize local companies and does not facilitates a foreign company
like Foodpanda accordingly rather impose different bans and limit its activities.

Strong Existing Competitors: In many countries where Foodpanda is operating its function has
already got strong competitors like Pizza hut, McDonald and other local food delivery shops. So
Foodpanda needs to fight hard with existing competitors and provide better service at the same
time.

Reluctance to Order Online: Many customers are unwilling to order food via online due to the
bad experience they already faced. Again many customers cannot even use internet to make an
order or they do not possess any debit or credit card to make the payment or they simply assume
it as “complex”.