Contents

INTRODUCTION 3

1.2 FUNDING HISTORY OF FOODPANDA 3

1.3 FACTS & FIGURES ABOUT FOODPANDA BUSINESS AND REVENUE MODEL 4
1.4 HOW DOES FOODPANDA WORK 4

FOODPANDA BUSINESS MODEL CANVAS 5

2.1 CUSTOMER SEGMENTS 6

2.2 VALUE PROPOSITION 7
2.3 COST STRUCTURE 7

2.4 FOODPANDA REVENUE STREAM 7

2.5 REGISTRATION FEES: 8

2.6 ADVERTISEMENT: 8
2.7 DELIVERY CHARGES: 8
2.8 COMMISSION: 8

E- BUSINESS IN ORGANIZATION 8

3.1 MISSION & VISION: 9

3.2 RANGE OF SERVICES: 9
3.3 E-BUSINESS MODEL 9
3.4 E-BUSINESS DRIVERS: 10

E-BUSINESS REVENUE MODEL 10

4.1 THE VALUE PROPOSITION OF FOODPANDA: 10

4.2 THE REVENUE MODE OF FOODPANDA: 11

4.3 ONLINE MARKETPLACE STRUCTURE OF FOODPANDA: 11

4.4 MARKET SEGMENTATION OF FOODPANDA: 12

4.5 REVENUE GENERATING STRATEGY OF FOODPANDA: 12
4.6 MARKET PLACE OF FOODPANDA: 12

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E-BUSINESS INFRASTRUCTURE OF FOODPANDA 12

5.1 E-BUSINESS APPLICATION SERVICE: 13

5.2 IT USE FOR E-BUSINESS APPLICATION: 13
5.3 WEB TECHNOLOGY AND SOFTWARE APPLICATION: 13
5.4 WEB CONTENT MANAGEMENT STRATEGY: 14

DIGITAL STRATEGY OF FOODPANDA 14

SWOT ANALYSIS 14
6.1 STRENGTHS IN THE SWOT ANALYSIS OF FOODPANDA 14
6.2 WEAKNESSES IN THE SWOT ANALYSIS OF FOODPANDA 15
6.3 OPPORTUNITIES IN THE SWOT ANALYSIS OF FOODPANDA 15
6.4 THREATS IN THE SWOT ANALYSIS OF FOODPANDA 16

FOODPANDA’S SECURITY RISK 16

INFORMATION SECURITY MANAGEMENT SYSTEM: 16

8. WITH PANDAMART, FOODPANDA AIMS TO BECOME EVERYTHING DELIVERY SERVICE 17

FOODPANDA COMPETITIVE ANALYSIS 21

9.1 THE SUDDEN CHANGE 21

9.2 THE CAREEM FACTOR 21
9.3 ENTRY OF CAREEM. 22
9.4 SUSTAINABILITY 23

CONCLUSION 23

2
Introduction
Foodpanda is a food delivery marketplace that operates in more than 50 countries. It is active in Bulgaria,

Asia Pacific, and Romania; the platform is owned by a Berlin-based company named Delivery Hero SE

and headquartered in Berlin, Germany. The platform enables food lovers to order their favorite and

mouth-watering dishes from local restaurants.

Foodpanda has partnered with more than 115,000 restaurants in about 246 cities. It has worked with

80,000 delivery riders; Delivery Hero acquired the company in December 2016. While in India,

Foodpanda’s business was acquired by cab aggregator Ola on 29 2017 for an undisclosed amount of $40-

$50 million.

The company sold its Delivery Club business in 2016 in Russia tomail.ru for $100 million. In the same

Foodpanda’s largest investor, Rocket Internet sold Foodpanda to German Competitor Delivery Hero. In

2017, Foodpanda rebranded from Orange to Pink with an updated logo; tech giant Delivery Hero

followed the rebranding.

The company started offering unique discounts and offers to increase platform traffic; in 2018, it

completed around 3 Lakh daily orders. This number increased to 5,000 daily orders by 2019. Ola

suspended the Foodpanda food delivery business in 2019 and fired more than 1,500 “food delivery

executives.”

The Foodpanda brand continues in-house brands, also known as “cloud kitchens.” The concept was

adopted by the company when it acquired Holachef in 2018. However, in 2019 the company will have

only three private label brands under its cloud kitchen business, including the Great Khichd experiment

and FLRT.

1.2 Funding History of Foodpanda

Foodpanda raised a total of $318 million in venture capital; the company raised 20 million in initial

funding from Investment Rocket Internet, AB Kinnevik, and phenomenon Ventures in 2013. iMENA

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Holdings invested around $8 Million in the same year; in 2014, the company raised $20 million from

investors and Phenomena Ventures.

Later Foodpanda announced that it had raised $60 million in financing from different groups of investors.

In 2015, Foodpanda announced it had raised more than $110 million from Rocket Internet and other

investors. And within a two-month time interval, Goldman Sachs and other investors invested over $100

Million in Foodpanda.

1.3 Facts & Figures About Foodpanda Business and Revenue Model
Founders: Lukas Nagel and Rico Wyder

Founded: in 2012

Headquarters: Berlin, Germany.

Foodpanda Valuation:$6 billion+

Foodpanda Funding: $100 Million from Rocket Internet and other investors.

Statista’s report shows that Foodpanda received around 8.7 million in 2014 alone while it had completed

about 22.6 million in 2015.

1.4 How Does Foodpanda Work

Foodpanda is an impressive platform that helps eateries to offer excellent service to a wide range of

customers who want to get their food delivered at their doorsteps. The company generates profit through

delivery fees; it decreases its operational cost by following some effective methods:

 Offer discounts for bulk purchases

 Build a higher network to deliver food on time

 Collecting cash before delivery

 Advertisement fees

 Offer different types of deliveries besides food delivery.

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Foodpanda can gain massive popularity in the market by focusing on all the terms listed above. The on-

demand app is increasing and has grabbed the tremendous limelight in the past few years. Hence, more

businesses consider investing in the on-demand solution; they are stepping into developing a feature-rich

foodpanda clone app for their business, helping them deliver a seamless delivery experience to food

lovers. Have a quick look to know how Foodpanda works to ensure prompt delivery to the customer’s

doorsteps.

Step 1: Food lovers explore the list of nearby restaurants and menu to order mouth-watering dishes from

them.

Step 2: Restaurants receives an order and prepare food

Step 3: Prepared order is handed over to delivery providers

Step 4: Delivery provider delivers the meals for the customers place

Step 5: Customers make payments and provide feedback according to their experience gained.

The simple and effective working of the Foodpanda makes it the best choice for food lovers and eateries.

You can also invest in an app similar to Foodpanda to boost your business growth for a long time.

Foodpanda Business Model Canvas

Foodpanda ensures to deliver a tasty, healthy, and unique experience to eating to food loves. It has

successfully eliminated the need to travel to restaurants as food lovers can get their food delivered right at

their place. It’s all about ordering online; the platform connects restaurants with a restaurant of their

choice. Learn everything to know how the platform works, what the business model consists of, and much

more right away.

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2.1 Customer Segments
Foodpanda has a multi-sided business model; it has two interdependent customer segments possessing its

importance this segment includes:

 Consumers

 Restaurants

 Delivery Providers

2.2 Value Proposition

The platform offers primary value propositions, including convenience, accessibility, customization,

brand status, and cost reduction. Foodpanda creates accessibility by allowing food stores to market their

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business to customers who don’t want to visit a physical location and find difficulty searching the website

online.

It enables customers to place an order from an advanced solution, ensuring to offer convenience, they can

place order 24*7 without any hassle through the platform. Customers are also provided with picking up

orders or getting them delivered at their place; they can pay with any payment method as per their

convenience.

The platform enables customization by enabling customers to filter restaurants as per different types. It

offers numerous engaging deals to customers like meal discounts, free deliveries, etc. The fantastic offers

increase customer engagement with the platform by enabling them to try new offerings and save their

money.

Foodpanda has developed a strong brand because of its business success; presently, it is successfully

operating in about 500 cities in 24 countries. An online ordering and delivery platform has also won some

great countries like European Tech Startup Award in 2014 for “Best E-commerce Startup.”

2.3 Cost Structure

Foodpanda has a cost-driven structure that mainly aims to minimize expenses, surge store sales, and

significant automation. The biggest cost drivers for the platform are sales/marketing and a fixed cost.

Some other major drivers include customer support, administration, and also fixed expenses.

2.4 Foodpanda Revenue Stream

Foodpanda’s most immense amount of revenue mainly comes from restaurants commission with which

the platform has partnered. The report shows that the platform earns more than 40% of revenue from the

delivery business, while 10% profit from ads. There are many other ways through which Foodpanda

generates revenue; explore to know how it creates money.

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2.5 Registration Fees:
Digitalization has increased the craze of getting food delivered right at their doorsteps. Rather than

restaurants and cravings nowadays, food lovers love to leverage the custom home delivery facility.

Foodpanda eliminates extra initiatives to manage and find delivery services. Foodpanda changes

approximately Rs 5000 for the registration.

2.6 Advertisement:
Foodpanda charges advertisement fees from brands. It enables restaurants to advertise their business on

the platform.

2.7 Delivery Charges:

Foodpanda charges fees on every delivered order; delivery charge cost entirely depends on delivery

location.

2.8 Commission:
Foodpanda claims around 30%-35% commission on every order which customers place through the

platform. Besides commission, restaurants don’t need to pay the place rent, electricity bills, and other

service costs; this ensures great profit-making for the platform.

E- BUSINESS IN ORGANIZATION
E-business is any business which operates its normal function by use of IT software and over internet. E-

business is more than just selling online rather its overall use of IT in the organization. They provide food

delivery service to a customer’s door steps. The business works by which a customer will order food from

their desired restaurant by using Foodpanda’s app. Then the customer might choose cash on delivery or

pay by using any preferred MFS system.

Then Foodpanda’s delivery boy will collect the food from the restaurant and deliver it to the customer’s

doorsteps.

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3.1 Mission & Vision:
Like every other company food panda has their own mission and vision. Foodpanda’s mission is to

“Bringing good food into your everyday”. That means they just don’t deliver but also goes extra mile to

make the customer’s satisfaction more memorable. Whatever our customer’s crave, we can help.

3.2 Range of services:

Foodpanda offers its customers the easiest way to order food from their preferred restaurants and get it

delivered at their doorsteps. Also they have started delivering grocery to their customers. They have a

wide variety of restaurants in their list for the customers to order from including different cuisines and

fast food.

3.3 E-Business Model

The e business model of Foodpanda is B2C. It is B2C because it delivers food from the business which is

the restaurant to the customer’s doorsteps. Foodpanda makes its revenue from the commission given by

the restaurant and delivery charge paid by the customer end. This is a B2C e business model. Foodpanda

follows B2C but delivers the food to the customers by using its riders.

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3.4 E-Business drivers:
The main drivers for this e business model of Foodpanda is the growing technology in the world? All

consumers have access to smartphones and internet. This has enabled consumers to make purchases from

internet. Also an increase of safe online payment has made consumers spending increase in online. The

drivers of adoption of e business are strong ICT infrastructure and internet security. And also there are

software such as SCM, CRM, KMS and ERP which helped business to adopt the e business model. Also

the growth and formation of big data has helped business adopt e business as it makes processing easier

and reliable.

E-BUSINESS REVENUE MODEL

4.1 The value proposition of Foodpanda:
The most important value proposition of Foodpanda is to make sure customers are delighted at every

point in the food. Foodpanda intends to offer value propositions in five ways which are:

 Foodpanda creates accessibility by ensuring consumers doesn’t need to visit restaurants

physically and can order from home and office etc.

 Foodpanda creates value proposition through comfort. Customers can pay by all major cards or

cash. The company also tends to give the quickest delivery. Consumers can also know about the

restaurants through the reviews.

 Foodpanda offers customization by allowing customers to filter restaurant choices by type of

cuisine and to filter meals by category.

 The company also reduces costs by offering many everyday deals, free deliveries, customer

discounts and so on.

 Foodpanda also creates value through communication once the customer places an order she will

receive a confirmation email/sms

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4.2 The revenue mode of Foodpanda:
Foodpanda has mixed revenue model. As Foodpanda acts as an intermediary

 Commission from listed restaurants.

 The company also earns profit by charging

delivery charges, according to Nauman Sikandar CEO of Foodpanda Pakistan, the company generates

40% of its revenue through delivery charges.

 Foodpanda earns 10% of their profit by displaying Ads.

 The company also sell customers behavior to market researchers.

4.3 Online marketplace structure of Foodpanda:

Click is a business model where the company can offer customers the benefits of fast online.

Foodpanda provides customers by bringing their desired food at the door step by just a click.

This happens when the customer interacts themselves through their website and mobile application.

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4.4 Market segmentation of Foodpanda:
Foodpanda has two interdependent customer segments that are both needed in order to operate.

Foodpanda does business with restaurants and customers of the restaurants. While market

segmenting Foodpanda concentrated on:

 Demographic: The company categorized young customers who perceives time as a more

valuable asset than money.

 Geographic: Foodpanda segmented its market by city and country, since people in different

places have different ordering pattern. Segmented in terms urban and semi urban population.

 Psychographic: The company also market segmented in terms of people’s value and beliefs.

That is why they provide Halal foods.

4.5 Revenue generating strategy of Foodpanda:

Foodpanda is generating revenue by taking many strategies. Such as:

 Pricing strategy: The company has adopted competitive pricing policy to maintain reasonable

price. They also offer discounts and special offers.

 Brand awareness: They have created brand awareness through massive advertisement which

also boosted their revenue.

4.6 Market place of Foodpanda:

The market place of Foodpanda is intermediary based, since Foodpanda links with the restaurants to reach

the customers in the supply chain. We can say, Foodpanda acts like a middleman and uses online platform

to reach customers. Foodpanda does not manufacture their own products.

E-BUSINESS INFRASTRUCTURE OF FOODPANDA

Foodpanda works as an intermediary between the restaurants and the customers. It assists the restaurants

who doesn’t have their own delivery systems and helps the customers get their desired restaurant’s food

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without stepping out the door. Here are some of the e-business infrastructures of Foodpanda explained

below:

5.1 E-business application service:

Basically Foodpanda uses CRM (customer relationship management) services to satisfy their customers.

They also use ERP application services to interconnect with them in house members. They use CRM to

do direct marketing efforts through Email and their mobile app. Also they do advertise on many social

media to reach their target customers. They value their customer’s needs by offering meals from almost

all the restaurants across the cities of Pakistan like Islamabad, Lahore, Karachi, Rawalpindi. Peshawar

etc. Foodpanda is associated with delivery, purchasing, checking the packaging etc. This creates an

effective relation with the suppliers and distributors which falls under SCM.

5.2 IT use for E-business application:

Foodpanda uses Internet for regulating their app as their business is fully online based. In wide sense they

are using extranet networks links which use IT technologies to interconnect the intranet of the restaurant

business with the intranets of its customers. In this way they establish a direct link among the customers

and the affiliated restaurants. The specific functions of extranet networks used by Foodpanda are, it

exchanges large amount of data using EDI between the channels, shares the different discounts and offers

of restaurants with their customers and reviews of the customers with the restaurants, reducing transaction

issues and also to increase flexibility and productivity.

5.3 Web technology and software application:

Foodpanda is basically using web 2.o technologies to run their E-business platform. By using

such technologies, it is easy for them to meet their customers’ expectations. It Is also helping them to

create an online brand image, increase customer loyalty and generate continuous sale. They are using

software application like GPS to track their customers address and the nearby restaurants to their target

customers. And they are also using Facebook app which enables customers to login their app with

Facebook account

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5.4 Web content management strategy:
For their web content management strategy, they use the storage of information. Which means at the very

first order of the customers they give a form which includes the person’s basic information which

foodpanda records and uses every time after that.

Digital Strategy of Foodpanda

SWOT ANALYSIS
6.1 Strengths in the SWOT Analysis of Foodpanda

 Excellent Platform – Foodpanda process various orders for the customers and sends them directly

to partner restaurants. Once the order is processed, it delivers it to its customers. The service is

available to the customers through mobile applications and websites, where the customers can

order food by entering their postcodes on the website. The customers can browse for food from the

restaurant list shown on the website. After the selection, the customers need to enter their address

and proceed for checkout. The respective restaurants receive the orders and the food will be

delivered to the customers. It will also send an SMS for order confirmation and the estimated

delivery time.

 Online Ordering – Foodpanda accepts orders through its websites and mobile applications. It

connects customers and restaurants.

 Investments – Foodpanda has raised a venture capital of $318 million. It had raised about $20

million in the initial funding from Rocket Internet and Investment AB Kinnevik during the year

2013. During the same year, iMENA Holdings had invested about $8 Million. It had also received

another funding of about $20 Million during the year 2014. Goldman Sachs had also invested

about $100 Million in Foodpanda. All these findings are, in fact, a huge strength to the company.

 Various International brands – Foodpanda has been taken over by the firm Delivery Hero during

the year 2016. The Delivery Hero brand contains multiple international brands. In Asia and Eastern

Europe, it is Foodpanda, in Europe, Canada, and Australia it is Foodora, in Middle East it is hello

food, and in Russia it is a Delivery Club, etc.

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  Global Operations – Foodpanda has its business operations in various countries in Eastern

Europe, Middle East, and Asia.

 Global Rebranding – During the year 2017, Foodpanda has re-branded from Orange to Pink by

having updated logs across all countries. The iconic panda remains at the forefront of its logo.

 Quick Delivery – Foodpanda process the food delivery with less time as it tries to sync its

customers to the nearby restaurants.

 Trained Employees – Foodpanda has trained people for making their delivery faster.

 Wide Coverage – Foodpanda has a wide coverage of restaurants and it fits the vast customer

requirements and food preferences.

 Good Customer Support – Foodpanda has excellent customer support and works for their

requirement and food preferences. It keeps changing the food menus and tries to expand it connect

with restaurants.

6.2 Weaknesses in the SWOT Analysis of Foodpanda

 Orders from nearby restaurants – Orders are only available from restaurants that are in the zone

of the order placed. This is a weak point as all the restaurants will not be available at all places.

 Tap on the Free Delivery – Quantity required for free delivery is sometimes a bit more for one

person.

 Yet to cover more – Foodpanda has not yet covered in all areas in a city.

6.3 Opportunities in the SWOT Analysis of Foodpanda

 Growing Market – There seems to be in the right fit as in the growing market there is the

possibility of potential customers.

 Customer Expansion – Foodpanda must expand its horizon to meet more customers’

requirements. It will have to tie with many restaurants and bring more customers to the website.

This will provide more opportunity for the business.

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  Increase in Customer Loyalty Programs – Foodpanda can set up may customer loyalty programs

to make the customer stay with them. They could initiate some offers, some reward programs, to

make them sustain with them. This would provide a huge opportunity for them.

6.4 Threats in the SWOT Analysis of Foodpanda

 Increased Potential Competitors – There seems to be an increased competitor in this market.

This is a major threat to the Foodpanda business.

 Low Customer – Over the years of its initiation, there seems to be a low customer in the business.

The business should bring out ways to increase their customers as it could be a serious threat to the

business.

 Change in economic condition – Economic changes in the world will affect the business. This is

also a huge threat to the company.

 Ease of going to the nearby restaurant – People might tend to go to the nearby restaurant instead

of getting it ordered through the website. This is also a threat to the business.

FOODPANDA’S SECURITY RISK

Information Security Management System:

1) Privacy: Privacy is something foodpanda should reconsider and there is a lot of way to break

that. Customers always don't want give their name, address, credit card information and once

they put out all the information to the website it become the websites duty to protect that.

2) Integrity: Integrity is when customers put any information and they aren’t altered by anything

and It's also a matter of authentication. Although as food delivery service they have customers’

valuable information and a lot of people have access to that. Therefore, as a company it should

bear trust and authentication.

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 3) Manipulation: As we know that customer give their personal information and it is confidential

but it can be manipulated by others and It's called social Engineering.

4) Moreover, a lots of people having access to that information it can get easily manipulated. So

we have to consider that.

5) Fake IDs: cybercrime is a problem for today’s world and if anyone want to harm anyone it can

easily happen through this and it is alarming. If anyone want to track the victim, they can

easily do that so foodpanda should consider that. And phishing is an unlawful way.

6) Denial of service attack: this is a cybercrime when criminal target the high profile website with

valuable information

8. With Pandamart, Foodpanda Aims to Become Everything Delivery

Service
Foodpanda has introduced a service Pandamart, a platform where customers can order and get groceries

and other essentials delivered at their doorstep. This is a natural extension of Foodpanda’s already fast-

growing food delivery service, thanks to the coronavirus pandemic. Pandamart follows Foodpanda’s

aggregation model where it aggregates grocery and other essential products shops under Pandamart,

aggregates demands, and enables these shops to deliver online orders to customers.

customers can order anything from daily essentials to the grocery to pharmaceuticals to electronics from

Pandamart. Business model and strategy-wise, Pandamart is to grocery and electronic stores what

Foodpanda is to restaurants.

Pandamart has attracted quite a bit of attention for its grocery delivery service since Foodpanda launched

the service in April in collaboration with Shwapno. But it is not only a grocery delivery service. Rather it

is an on-demand delivery service for everything essential. The expansion can be viewed from both

perspectives that Foodpanda has built enough operational muscle and sees a lucrative opportunity in these

new verticals and that Foodpanda needs to expand beyond food delivery to build a large enough business

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making it inevitable for the company to prematurely expand into these new verticals while its business in

food delivery remains limited in scale. Regardless of how you view the expansion, it is an important event

in Dhaka’s tech space and indicates that with enough cash in pocket you can chase multiple verticals at

once and tech marketplaces can and are willing to pursue growth in every relevant vertical where there is

a possibility of growth.

Foodpanda is a business that operates at the intersection of logistics and demand aggregation. Take, for

example, Foodpanda’s food delivery business that operates in partnership with restaurants. Generally

speaking, Foodpanda basically offers two things to restaurant partners:

1)logistics support where Foodpanda enables restaurants to take online orders and deliver them to

customers since the majority of restaurants don’t have their own logistics wing or a system to take online

orders and fulfill them.

2) Foodpanda generates orders for these restaurants through its online platform where it aggregates

restaurants, designs lucrative campaigns in collaboration with restaurants, and brings in customers thus

generating a consistent demand for its restaurant partners.

For logistics, Foodpanda charges a delivery fee to customers. For-profit, it charges a commission on

restaurants. To begin with, Foodpanda offers excellent benefits to both restaurant partners and customers

and as its market power grows through demand aggregation, it can effectively set the rules of the game.

As market power grows and Foodpanda manages to aggregate enough demands, it looks for more ways to

make money using the power. Foodpanda getting into Cloud Kitchen is one such way for the company to

improve its margin. Cloud Kitchen does two things for Foodpanda:

1) it improves margin

2) and it improves its standing with restaurant partners thus enabling it to ask for a better commission.

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Pandamart is yet another way for Foodpanda to leverage its market power gained through demand

aggregation in the food delivery business. This time it's about expansion. With Pandamart, Foodpanda

aims to replicate with grocery shops, pharmacies, essential items shops, what it has done with restaurants.

The majority of offline retail stores don’t have a mechanism for managing and fulfilling online orders.

These shops don’t have a way to accept online orders aka a website. They often don’t have a logistics

system to execute deliveries. Foodpanda offers both to these shops. As the business grows, Foodpanda is

likely to use the playbook it used for food delivery for growing and building Pandamart business such as

setting the stage for asking for a better commission, getting deeper into the supply chain, and launching

white-label brands and so on.

The Pandamart hypothesis is quite straightforward and is similar to the dominant hypothesis currently

being used in building technology companies, which is leveraging demand to expand to adjacent

verticals. Foodpanda has built a fast-growing business around ready food delivery in Bangladesh. The

company now wants to use the same expertise in logistics and demand aggregation to deliver other

essential goods and expand its universe. Foodpanda has been able to aggregate a good number of users

through a combination of strategies. The company believes that it can now sell more things to these same

users. Thus comes the expansion to more verticals. The expectation is that the same customers who come

to Foodpanda for food delivery will now order other products from Foodpanda. While this is a lucrative

model on paper, companies that tried similar models in the past offer mixed results at best. Which means

we will have to wait a few more months for the Pandamart score.

Delivery is increasingly becoming a hyper-competitive space. Several companies are approaching

deliveries with almost similar strategic advantages and expansion thesis. Pathao has launched several

initiatives in the delivery space. Uber has moved into the space of late and we can expect that Uber will

soon enter other areas of deliveries in every market where it operates. Shohoz has been active in several

verticals as well. While only a tiny number of players will eventually survive, the overcrowding of the

space makes it expensive for any new entrants. Customers ask for more discounts. Businesses demand

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greater facilities and often decline to pay the commission on which these types of businesses rest on for

revenue models.

Aggregating demand using aggressive acquisition techniques and then trying to sell more services to the

same customers has been one of the defining trends in technology company building space for the last

two decades. Companies take an aggressive customer acquisition approach in one vertical and then use

that demand aggregation to expand to other relevant verticals. While the strategy makes for a great

narrative and a perfect sense on paper, in reality, it is often a tall order.

The challenge comes from three areas:

1) having a large number of users for one service does automatically make you capable of delivering a

completely different service/product to the same users. For example, the dynamics, economics, and

supply chain of grocery delivery are quite different from ready food delivery. Building expertise and then

offering quality service in a new vertical is often expensive and takes time.

2) while the internet allows aggregation to an extreme extent, most delivery businesses are not pure

software businesses. There are strong and critical offline components involved. Aggregating users for a

software solution is easy but it is unlikely to be the same for something like grocery.

3) Users necessarily do not prefer a general aggregator that does everything over a specialized business

that operates in a certain niche and thus can offer greater depth and superior service in that niche. It

means users who order food on Foodpanda can shop groceries on Chaldal instead of using Pandamart

simply because Chaldal is better for groceries.

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Foodpanda competitive analysis
Careem, however, is a relatively new entrant in the food delivery space that is trying to make its way into

the market through its super app. Careem’s foray into the Pakistani market relies not just on the capital

they have at their disposal in trying to compete against Foodpanda, but rather an opening created by

Foodpanda’s tactics, which many restaurants believe are too aggressive. As many restaurants try to band

together to fight back against what they see as an abuse of near-monopoly power by Foodpanda in the

food delivery space, Careem sees the opportunity to come in as the white knight for the restaurants, and

possibly even the regulators.

9.1 The sudden change

why is Foodpanda being abrupt about the vendor delivery and commissions. Foodpanda has been in

Pakistan’s streets with food since 2011 and yet has not made a dime in profits. Its parent company has

been pumping capital into it year after year and bears its losses. However, this parental love seems to

have run its course. One would assume Foodpanda has been told to start hitting positive cash flow and get

down to business.

It cannot sustain its operations without raising commissions or without losing out on the supply side and

ultimately the demand side when restaurants are no longer able to provide deals and discounts. It could

also be said that Foodpanda went with a calculated move. It got the industry used to volumetric sales

through its platform and is now having things its way.

9.2 The Careem factor

The problem with that strategy, however, appears to be that the Foodpanda management assumed that

once they dominated the market, it would be game over and anyone who wanted to be in the food

delivery business would have to go through them.

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9.3 Entry of Careem.

The Dubai-based ride-hailing giant has competitive problems of its own, having recently been acquired

by Uber – the only other serious ride-hailing platform in Pakistan – but in this situation, it appears to be

throwing a wrench into Foodpanda’s monopolistic plan.

Careem’s strategy is to be get the restaurants on its side by giving in to nearly all of their core demands,

and thus getting some of the more desirable, high-ticket-size restaurants on its platform, while leaving

Foodpanda with the lower end restaurants, where the margins are even tougher to begin with.

It is perhaps not entirely coincidental that that the restaurant strikes against Foodpanda arose from

Karachi, currently the only city where Careem offers its food delivery services. The restaurants in

Karachi, unlike those in other major cities, have a choice: they can go with Careem, which may not be big

in the food delivery space yet, but has a large, engaged user base, and the technology and financial

backing to be a sustainable competitor to Foodpanda.

Careem has been quite public in its stated support of the restaurants: it issued a public statement that it

would “pledge to support restaurants in Pakistan.” It goes on to offer restaurants most, if not all, of what

they have been demanding of Foodpanda.

Here is what it is offering restaurants: Careem is willing to charge a commission anywhere between 15-

20% with an annual commitment to keep the commission rate fixed for the full year. This will include the

delivery by Careem and platform cost. Restaurants will have the option of going with Careem delivery, or

choosing their own delivery teams. If they go with their own delivery teams, they will be charged an even

lower commission.

Careem is set to launch food delivery in Lahore within a fortnight, and plans to move into Islamabad by

December 2020. At the time of writing this story, the Lahore Restaurant Association has announced a

boycott of Foodpanda starting 20 September if their demands are not met. And Careem may not be alone

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in its courting of restaurants. Other delivery services, Profit has learned, may also jump into the fray with

favorable terms for restaurants.

9.4 Sustainability

Smaller members of APRA are alleging that bigger and powerful members of APRA are pushing them to

keep their tablets off as they have now managed to cut a deal with Careem.

In some ways, however, Careem is following in the footsteps of Foodpanda. This method of appealing to

restaurant owners will eventually result in restaurants getting used to certain rates and higher customer

volumes offered through their apps. While at some point, this appeasement will eventually be

unsustainable for Careem, it seems as if they are out to give the market leader a run for its money,

especially considering how Careem is also backed with money.

If they are anything like Foodpanda, they will continue at it through the support of their parent company

until they have absolutely established a strong footing in the market. That is when they will begin

business.

Conclusion
Foodpanda is making significant progress. In order to engage consumers, the Foodpanda

crew is using social media channels to their best potential. It has seen significant development as

a result of its use of digital marketing, social media marketing, and marketing automation. If

Foodpanda keeps innovating and improvising, it won't be long until it becomes the dominant player

in the online dining and delivery sector. It is the nation's top internet-based- food and grocery

delivery firm, and it is devoted to uniting eager consumers with local takeaway eateries via its

platform. Regardless of the fact that Pakistan's digital revolution is not as quick as that of other

nations. Foodpanda Pakistan has acquired a large number of local clients in a relatively brief

span of time. It is always concentrating on company advancement in order to remain successful in

the challenging tech sector.

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In the current food delivery industry foodpanda is one of the toughest competitors. They have a very

unique business model where they are acting as a middle man between the restaurants and the

customers by lending its logistics force to deliver the food.

But foodpanda can generate more profit by enhancing their advertisements and promotions and

through their delivery systems. Lastly, they have to be more concerned with their security issues and

should look after it to make their e-commerce platform more strong.

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