Foodpanda: The Pioneer of digital food delivery

How food panda revolutionised the food delivery industry

Food panda logo
Image: Food panda logo by The Star. All rights Reserved. From https://www.thestar.com.my/news/nation/2019/10/07/foodpanda-to-stick-with-new-payment-scheme-for-now

No need to be hangry, Foodpanda is here!

For years, the concept of ordering food through the Internet seems impossible. Though food delivery service was available, they were always limited to each restaurant. Customers would call said outlet and they would prepare the order then deliver it directly to one’s house. The idea of having food directly delivered to you wasn’t new or innovative. Many businesses have implemented the service since a long time ago. So what changes?

Following the vast growth of technology and digitalization, food delivery services have changed its game. Today, we are introduced to online food delivery. Individuals can now easily order food online through mobile apps or websites. And this is where Foodpanda enters the scene. The Foodpanda group is a leading global company specialising in creating online food delivery marketplace. Headquartered in Berlin, Germany, the company has branched in over 260 cities, 12 countries, across 5 continents (Smith, 2020). Observing the immense success of Foodpanda, this essay will provide a recapitulation of the company’s operations, development, and how it changed everything.

 

A short history of Foodpanda

As written earlier, Foodpanda is an online food delivery marketplace. It was founded in 2012 by creators Raif Wenzel and Benjamin Bauer in Germany, who worked for Rocket Internet (Hoare, 2017). In its early stage, the company was considered as the dawn of online food ordering. More companies began to venture into the business seeing how successful Foodpanda has become. As a result, the popularity of online food delivery services sky-rocketed (2016). By the end of 2013 Foodpanda had successfully expanded itself to 16 other countries and as of 2016 the number added up to 24. The company’s growth was significant and world-changing. Although the company goes by the name Foodpanda in Europe and Asia, it goes by the name of Hellofood in Africa, the Middle East and Latin America (Wenzel, 2016b).

Foodpanda becomes an instant success worldwide because of their user-friendly, high-quality and effective interface. The company has profitably charmed its way to introduce a new and innovative way of food delivery. As the company expanded, it was able to adapt to each country. Their mobile app or website are characterized and specifically designed in order to adapt. What makes Foodpanda different from other food delivery apps during its initiation was their system of tracking and reviewing. Customers are also able to cancel their orders.

 

Adapting in a Digitalized Era

In the opinion of Li and friends (2020, p.2) the rapid growth of e-commerce over the past decade has caused customers to move online. The shift has spawned many new forms of business, such as an increase in disposable income, longer work and commuting times, increased broadband penetration and improved safety of electronic payments, a relaxing of trade barriers, an increase in the number of retailers having an online counterpart, and generally a higher awareness of e-commerce by customers.

Ji and friends (as cited in Li et al., 2020) explained how the advancement of e-commerce has given rise to many new forms of business, such as B2B (business to business), C2C (customer to customer), B2C (business to customer) and O2O (online to offline). The O2O commerce is a marketing method based on information and technology, however customers can place orders for goods or services online and receive said goods and services at an offline outlet. O2O services have emerged in various fields, including in the food and beverages industry. Online food delivery refers to the process of food that was ordered online and delivered directly to the consumer’s home.

                                                              Image showing Foodpanda’s older interface
                                                Image: Tech Buzzes, Mohammad S. Ali, Some rights reserved

 

Online food delivery services are widely available everywhere by now. It is no longer advanced or unfamiliar, almost every individual has tried ordering food through the Internet. According to Das and Ghose (2019), the idea of food delivery is widely growing due to the increase in the number of the working population and their hectic work-life culture in metropolitan cities. The current scenario has caused a massive competition, not only between online food delivery services but also with traditional restaurants providing free home delivery services (p.1372).

As previously mentioned, Foodpanda operates in nearly 40 countries all over the world. The company’s market focuses on a young upwardly mobile demographic who enjoys the convenience of eating restaurant quality food at home. By ordering via their mobile app or website, consumers can order food and beverages easily without a hassle (Hoare, 2017).

Video: Foodpanda’s Youtube Commercial

In the midst of their busy lives, customers spend more time working, studying, or commuting instead of having meals in restaurants. The emergence of online food delivery services such as Foodpanda, Zomato, Go-Jek, Swiggy, Ubereats and many others can be attributed to the changing nature of urban consumers.

Shoppers used these apps for a variety of reasons, though the most common reason seems to be the need of quick and convenient meals. More and more individuals are turning to these services as it allows them to have fresh and healthy food while they have the freedom to continue work or study. Using online food delivery services like Foodpanda, provides efficiency for customers as they can purchase food without stepping out of their homes or offices (Chai et al., 2018).

Foodpanda’s Innovative Business Model

There are many different definitions to explain what a business model is. Here are what some experts said about business model (as cited in Fielt, 2013, p.87-88):

  • Timmers (1998), defined a business model as an architecture for a product, service and information flows.
  • Amit and Zott (2001) define business models as the content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities.
  • George and Bock’s (2011) recent definition, which explains that a business model is the design of organizational structures to enact a commercial opportunity Logically speaking, business owners would grab opportunities that are viewed as a new source of revenue generation.

Especially for online food delivery services, consumer’s preference is the main motivating factor for business owners (See-Kwong G et al., 2016). Similarly, Foodpanda tries to fulfill the demand by creating an online food ordering market.

Foodpanda has two interdependent customer segments that are needed for operation, consumers and restaurants. The company offers a huge value in comparison to normal food delivery or traditional takeouts. Aside from accessibility and convenience, users can also choose an array of food or beverages to their liking. Customers can also customize, choose and filter restaurants based on their cuisines or type of food. This method of ordering has proven to lead to higher customer satisfaction. Users would also be more willing in recommending the brand if the experience was pleasant (Kimes, 2011, p.6-18).

The company tries to gain advantage from tracking customer’s preferences. According to a managing director of Foodpanda Singapore, Mr. Luc Andreani, data currently drives about 90% of the company’s decisions.

They also shared weekly data reports with restaurant partners, including recommendations for under-performing brands (Wong, 2018). Foodpanda apps and websites also share recommendations for users to show nearby restaurants of different categories. The CEO of Foodpanda India shares that they always try to take customer’s feedback and requirements into consideration (Anand, 2017).

 

Internet Ecology of Foodpanda

The term Internet ecosystem is used to describe the organizations and communities that have organically evolved to guide both operations and development of the technologies that comprise the global Internet. The ecosystem is heavily characterized by the involvement of a broad range of actors, open, transparent and a collaborative process (Global Multistakeholder Meeting on The Future of Internet Governance (“NETmundial”), 2014).

The sudden emergence of Foodpanda has made them the pioneer of online food deliveries. To summarize, there is an increase of usage and incorporation of the Internet in almost all business sectors in the world (See-Kwong G et al., 2016).

There are several companies which serve as rivals or major competitors to Foodpanda, for example UberEats, Doordash, Grubhub, Just Eat, Zomato, Deliveroo, and many others depending on which country it operates. All of these companies have their own advantages and benefits, but they all have approximately the same food delivery system. Differences may occur in whether these platforms are recruiting independent delivery people or professional riders who are already trained beforehand (Li et al., 2020).

                         Picture showing the map of different food delivery services based on their territories
                                   Image: The Business of Business, Thinkmum Media, All rights reserved

Foodpanda’s biggest suppliers are restaurants and internet infrastructure. Restaurant owners are not only Foodpanda’s suppliers but also users and partners. As for the company’s regulators, each country’s government plays a huge role in determining the rules. Foodpanda’s major partners include banking services and also their drivers.

 

Foodpanda’s Internet Ecology

 

Foodpanda, a blessing in disguise

Entering a new era of technology and digitalization, Foodpanda becomes a big player in the online food delivery competition. Following the pandemic, lockdowns and with more people stuck at home due to the COVID-19 outbreak there’s an increase of demand for food delivery services.

Foodpanda’s Asia-Pacific chief executive, Jacob Angele, confessed that it has been a challenge dealing with the surge of demand, changing customer behavior and new health protocols for both drivers and customers. Angele explains how the whole ecosystem has been heavily impacted. Nevertheless, Foodpanda is seeing aggressive growth and positive development across most of the Asia-Pacific market (Deng, 2020).

Aside from that, Foodpanda becomes a helping hand in reducing unemployment. The company becomes astonishingly successful due to their employees and responsibilities. Based on a study by Kamilah and friends (2020) the company has a better working environment compared to other food delivery companies. Furthermore, the company gave freedom to the employees to arrange their working schedule (p.65).

By now, Foodpanda is still recruiting riders and employees for various positions. Head of people operations in Foodpanda Hong Kong, Queenie Kwong, explained how they try to lend a helping hand to support the market. The company also works hard to support their restaurant partners and businesses (Chan, 2020).

 

Conclusion

Today, Foodpanda has become one of the most successful online food delivery services in the world. The success of Foodpanda has made all parties satisfied, whether they are customers or employees. As stated before, Foodpanda’s mission is to bring good food into your everyday, this means making the extra mile to make the customer’s experience memorable. Overall, the company has literally changed the game for traditional food delivery services. Its has transformed a fairly neglected and undermined service of a restaurant into something innovative and new.

 

 

References

Anand, S. (2017, October 5). Food Panda App Now Comes With A Recommendation Feature | HungryForever Food Blog. HungryForever Food Blog. https://www.hungryforever.com/food-panda-app-now-comes-recommendation-feature/

 

Chai, L., Ng, D., & Yat, C. (2018). Online Food Delivery Services: Making Food Delivery the New Normal. Journal of Marketing Advances and Practices, 1(1). http://jmaap.org/wp-content/uploads/2019/01/5-Online-Food-Delivery-Services-Making-Food-Delivery-the-New-Normal-201911.pdf

 

Chan, S. (2020, November 4). Foodpanda organises recruitment event amid the pandemic. Humanresourcesonline.net. https://www.humanresourcesonline.net/foodpanda-organises-recruitment-event-amid-the-pandemic

 

Das, S., & Ghose, D. (2019). Influence Of Online Food Delivery Apps On The Operations Of The Restaurant Business. INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH, 8(12). http://www.ijstr.org/final-print/dec2019/Influence-Of-Online-Food-Delivery-Apps-On-The-Operations-Of-The-Restaurant-Business-.pdf

 

Deng, I. (2020, May 14). Covid-19 has been a ‘roller-coaster ride’ for Asia’s food delivery business, says Foodpanda Asia CEO. South China Morning Post; South China Morning Post. https://www.scmp.com/tech/start-ups/article/3084383/covid-19-has-been-roller-coaster-ride-asias-food-delivery-business

 

Fielt, E. (2013). Conceptualising Business Models: Definitions, Frameworks and Classifications. Journal of Busi-Ness Models, 1(1), 85–105. http://journalofbusinessmodels.com/media/1017/vol-1-no-1-pp-85-105.pdf

 

Foodpanda. (2014). About | foodpanda | foodpanda. Foodpanda.Ph. https://www.foodpanda.ph/contents/about.htm

 

Global Multistakeholder Meeting on The Future of Internet Governance (“NETmundial”). (2014). https://www.internetsociety.org/wp-content/uploads/2017/09/ISOC-Internet-Ecosystem.pdf

 

Hoare, S. (2017, October). Case study: Food Panda | CEMS Magazine. Cemsmagazine.org. https://www.cemsmagazine.org/case-study-food-panda

 

Kamilah, N., Kee, D. M. H., Syafiq, M., Aina, S., Yap, H. S., Alqallaf, A. A., & Quttainah, M. A. (2020). Factors Affecting Organizational Success: A Case Study of Foodpanda. Journal of The Community Development in Asia, 3(3), 58–69. https://doi.org/10.32535/jcda.v3i3.890

 

Kimes, S. E. (2011). The Current State of Online Food Ordering in the U.S. Restaurant Industry. Cornell Hotel and Restaurant Administration Quarterly, 11(17), 6–18.

Li, C., Mirosa, M., & Bremer, P. (2020). Review of Online Food Delivery Platforms and their Impacts on Sustainability. Sustainability, 12(14), 5528. https://doi.org/10.3390/su12145528

 

See-Kwong G, Soo-Ryue N, Shiun-Yi W, & C, L. (2016). Outsourcing to Online Food Delivery Services: Perspective of F&B Business Owners. The Journal of Internet Banking and Commerce, 22(2), 1–18. https://www.icommercecentral.com/open-access/outsourcing-to-online-food-delivery-services-perspective-of-fb-business-owners.php?aid=86136

 

Shona. (2016, April 6). Foodpanda – Asia’s Food Delivery Platform – Demystify Asia. Demystify Asia. http://www.demystifyasia.com/foodpanda/

 

Smith, C. (2018, March 10). 14 Interesting Foodpanda Facts and Statistics. DMR. https://expandedramblings.com/index.php/10-interesting-foodpanda-facts-statistics-december-2017/

 

Thinknum Media. (2018, November 23). Delivery Wars: the world’s top-10 food-ordering services and where they battle for territory. Businessofbusiness.com; Thinknum. https://www.businessofbusiness.com/articles/delivery-wars-where-the-worlds-food-delivery-services-are-battling-for-territory/

 

Wenzel, R. (2016a, July 13). Foodpanda. Cleverism. https://www.cleverism.com/company/foodpanda/#:~:text=Foodpanda%20has%20a%20multi%2Dsided,obtain%20customers%20outside%20usual%20channels.

 

Wenzel, R. (2016b, July 13). Foodpanda. Cleverism. https://www.cleverism.com/company/foodpanda/

 

Wong, W. (2018, May 31). Food delivery apps ride on power of data. CNA; CNA. https://www.channelnewsasia.com/news/technology/foodpanda-deliveroo-food-delivery-apps-ride-on-power-of-data-10288562