How does Foodpanda make money?

Foodpanda is an online grocery and food delivery service owned by the European multinational company Delivery Hero.

Foodpanda was started in 2012 by Benjamin Bauer, Christian Mischler, Felix Plog, Kiren Tanna, Ralf Wenzel, Rico Wyder, Rohit Chadda, and Simon Schmincke.

Each of the founders was working for the German incubator Rocket Internet at the time, which was known to take proven business ideas and introduce them to underserved regions.

One such region was Southeast Asia, where it soon became apparent that the food delivery and grocery market was ripe for exploitation.

In April 2012, Foodpanda was launched in Malaysia, Singapore, Thailand, and India, among other countries. Within twelve months, the service had partnered with thousands of restaurants across 27 countries.

Around 2015, Foodpanda changed its restaurant aggregator business model in response to the emergence of smartphones in the Southeast Asian region.

Similar platforms such as DoorDash provided their couriers, allowing many restaurants to offer takeaway but not be required to deliver the food themselves.

By the end of 2016, Rocket Internet sold Foodpanda to Delivery Hero. As a result of the acquisition, Delivery Hero hoped to process over 20 million orders per month in 47 countries.

Further expansion saw the Foodpanda platform offered in Myanmar, Cambodia, Japan, and Laos in 2019 and 2020.

Today, Foodpanda partners with more than 115,000 restaurants around the world in over 400 cities.

Aspect	Description
Commission from Restaurants	Foodpanda partners with a vast network of restaurants and food establishments. When customers place orders through the Foodpanda platform, the company earns a commission from the restaurants on the total order value. This commission fee is typically a percentage of the order amount and serves as a significant source of revenue for Foodpanda. Restaurants benefit from Foodpanda’s extensive customer base and delivery infrastructure.
Delivery Fees	Foodpanda charges delivery fees to customers for the convenience of having their food orders delivered to their doorstep. These fees vary depending on factors such as location, distance, and the restaurant’s pricing strategy. The delivery fees help offset the operational costs associated with the food delivery service and contribute to Foodpanda’s revenue.
Promotional Partnerships	Foodpanda often collaborates with restaurants and food brands on promotional initiatives. This can include offering discounts, promotions, and special deals to attract more customers to the platform. While these promotions may reduce the immediate revenue per order, they aim to increase order volume and customer loyalty over time.
Subscription Services	In some regions, Foodpanda offers subscription-based services to customers. Subscribers pay a monthly fee in exchange for benefits such as free delivery on eligible orders, exclusive discounts, and priority customer support. Subscription fees from these services provide a recurring source of income for Foodpanda.
Advertising and Sponsored Listings	Foodpanda may generate revenue through advertising and sponsored listings within its app and website. Restaurants and food brands may pay for featured placements or advertisements to gain visibility and attract more orders. These advertising fees contribute to Foodpanda’s income.
Challenges and Competition	Foodpanda operates in a highly competitive market, facing competition from other food delivery platforms and ride-sharing companies that offer similar services. Staying competitive, optimizing delivery logistics, and ensuring a positive user experience are ongoing challenges.
Future Growth Strategies	Foodpanda’s future growth strategies may involve: – Market Expansion: Expanding its presence into new cities and regions. – Diversification of Services: Offering additional services like groceries and convenience items. – Enhanced Technology: Investing in app and website improvements for a smoother user experience. – Restaurant Partnerships: Attracting more restaurants to join the platform. – Customer Loyalty Programs: Launching programs to retain and reward frequent users.

Table of Contents

Foodpanda revenue generation

Foodpanda has a typical revenue generation strategy for a food delivery business. The company utilizes the marketplace business model, matching riders and restaurants with customer demand.

A more detailed look at revenue generation is provided below.

Commissions

Foodpanda makes most of its money through restaurant commissions.

When a consumer places a food order, the company charges anywhere from 25 to 30% of the total order amount to restaurants.

Delivery fees

Consumers ordering food also pay delivery fees, with the exact fee depending on the country-specific market.

Fees are also contingent on how close the customer is to the restaurant, with larger distances commanding higher delivery fees.

Foodpanda also charges delivery fees as part of its Pandago service. Other businesses can utilize its fleet of couriers to make same-day deliveries on food, groceries, documents, and other retail products.

Because Foodpanda cannot collect a restaurant commission from these orders, the delivery fee is likely to be much higher to compensate.

Subscriptions

Pandapro is the name given to a monthly subscription program for consumers, allowing them to receive exclusive deals and benefits. Such perks include free delivery and access to various discounts and vouchers.

The subscription fee charged depends on the consumer’s country of residence.

Grocery sales

Grocery sales are handled through a service called Pandamart, an on-demand platform selling over 3,500 daily essentials such as fresh produce, household items, beauty products, and medication.

Products are stored and distributed from Foodpanda-owned and operated warehouses. To make a profit, it can be assumed the company is marking up prices on certain items.

Key takeaways:

Foodpanda is an online grocery and food delivery service owned by the European multinational company Delivery Hero. The founders of the platform worked for Rocket Internet, a start-up incubator known for replicating successful business models in underserved markets.
Foodpanda adheres to a typical revenue generation strategy for a food delivery business. It charges restaurants a commission fee and consumers a delivery fee.
Foodpanda also offers a consumer subscription service, giving them access to various discounts and perks. The company also operates an on-demand grocery platform for household staples and other essential items.

Key Highlights

Founding and Expansion: Foodpanda was founded in 2012 by a group of entrepreneurs working for Rocket Internet. It started as an online food delivery service in Southeast Asia and quickly expanded to multiple countries including Malaysia, Singapore, Thailand, and India.
Business Model Evolution: In response to the rise of smartphones and changing market dynamics, Foodpanda transitioned from a restaurant aggregator model to a platform that also provided delivery services. This allowed restaurants to offer takeaway without needing to manage their own delivery logistics.
Acquisition by Delivery Hero: In 2016, Delivery Hero acquired Foodpanda from Rocket Internet. This acquisition aimed to enhance Delivery Hero’s global reach and processing capacity, with the goal of handling millions of orders monthly across numerous countries.
Global Reach: After the acquisition, Foodpanda continued to expand its services into new markets, including countries like Myanmar, Cambodia, Japan, and Laos. As of now, it partners with over 115,000 restaurants in more than 400 cities around the world.
Revenue Generation: Foodpanda’s revenue primarily comes from several sources, including restaurant commissions, delivery fees, subscriptions, and grocery sales.
Restaurant Commissions: Foodpanda charges restaurants a commission fee for each order placed through its platform. This fee typically ranges from 25 to 30% of the total order amount.
Delivery Fees: Customers ordering food are charged delivery fees, which vary depending on the specific market and distance between the restaurant and the customer. The company also offers its delivery fleet for same-day deliveries of various products.
Subscription Service: Foodpanda offers a subscription program called Pandapro, allowing customers to access exclusive deals, free delivery, and discounts for a monthly fee. The subscription cost varies based on the customer’s country.
Grocery Sales: Foodpanda operates Pandamart, an on-demand grocery platform that sells essential items such as fresh produce, household goods, beauty products, and medications. The products are stored and distributed from Foodpanda-owned warehouses.
Market Presence: Foodpanda’s platform has a dual role of connecting customers with restaurants and providing a convenient channel for groceries and other essential items. Its global presence and versatile offerings make it a prominent player in the food delivery and online grocery sectors.