Delivery Hero returns to Germany

It is the next step in the competition with Lieferando: Germany’s largest food delivery company had sold its home business to the competitor. Now he attacks again – and also delivers supermarket items.

Delivery Hero's new brand in Germany is mainly known in Asia: a food panda driver in Indonesia

Wif he likes to order food online, he’ll soon be able to do so again at Delivery Hero in Germany. The delivery service, which is listed in the Dax and has its headquarters in Berlin, announced on Wednesday that it would return to its home market in the summer. Almost three years ago he had sold his German business to the Dutch competitor Takeaway. He, in turn, has been running the now almost undisputed market leader Lieferando. Now Delivery Hero apparently sees the opportunity for a fresh start.

As stated in the company’s announcement, Delivery Hero will be launched in Germany under the “Foodpanda” brand, which has so far been known primarily in Asia. The drivers will appear in pink. In June, the couriers are to start making deliveries in Berlin, then the service is to be gradually expanded to other German cities. In addition, they should not only deliver food, but also groceries.

In this business, which Delivery Hero is already successfully operating in other countries, the start-up Gorillas in particular recently caused a stir in Germany – with the promise of delivering food and other everyday goods within ten minutes. Delivery Hero is now countering this with an even more ambitious promise and announces that it will partially deliver orders in seven minutes.

Movement in the German delivery services market

The long undisputed quasi-monopoly of Lieferando in Germany should finally get visible cracks. The Finnish service Wolt started last summer in Germany, which now delivers in Berlin, Munich, Frankfurt and Hanover. In addition, several regional delivery services started work, for example Eatura in the Rhine-Main area. Most recently, Uber Eats, the delivery service belonging to the Uber driving service, was added and began delivering food in Berlin.

At the same time, the market for food deliveries has developed strongly since the beginning of the corona pandemic. According to the consulting company KPMG, sales of “e-food” in Germany have grown by 67 percent in one year. Among the online supermarkets, Gorillas – which recently also attracted attention through large-scale poster advertising – competes with Picnic or the REWE delivery service.

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To the detailed view

Delivery Hero wants to use both trends for itself: “Delivery Hero sees great potential in Germany because customer demand has developed further and the market has not yet been sufficiently developed,” the company said. However, investors only shared this optimism to a limited extent: On Wednesday morning, Delivery Hero’s share price fell by 2 percent.

Lieferando also wants to get into the grocery business

In response to Delivery Hero’s announcement, the competitor Lieferando announced on Wednesday that it would also enter the food delivery business. “The company is opening to working with large grocery chains and local grocery stores,” he said. A delivery should take place on average in 20 to 30 minutes.

Unlike Delivery Hero, Lieferando’s parent company Takeaway is still new in this business: Germany will be a test market for food deliveries, the company writes. An expansion with a similar approach to the Netherlands or Great Britain is being considered. However, Lieferando can fall back on the largest delivery network in Germany: According to its own information, it has more than 10,000 couriers and delivers in 50 German cities. 30 more cities are to be added by the end of the year.