Food delivery firm invests in third-party restaurants

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KARACHI: The international online food delivery company, foodpanda, is investing in third-party restaurants and supporting home-based chefs in Pakistan in a bid to expand operations beyond main cities to all over the country.

It expresses confidence that the growing number of tech-savvy people will continue to fuel its ride to deliver food to a large number of customers in the existing 35 and new cities in the country.

In an interview with Daily City News, foodpanda APAC (Asia-Pacific) CEO Jakob Sebastian Angele said “Pakistan is one of very important countries for foodpanda.”

“One challenge we see is that while we have a lot of customers who want to order foodpanda, very often there are not so many restaurants actually available because in smaller cities the restaurant density is quite low,” he said.

Angele said the number of restaurants in Pakistan remained low compared to Thailand, Hong Kong and Italy, for example. “So, we are working with a lot of restaurants like how can we enable them to expand.”

“We give them payment. We give them loan or help them to get a loan from bank. We form partnership with them, (give them) market insight…helping restaurants to expand to other cities and to different neighbouhoods in the same cities.”

More than 20,000 restaurants and food outlets are registered with the foodpanda app across Pakistan.

Online food orders, both within the industry and for foodpanda specifically, are growing consistently. The compound annual growth rate (CAGR) of the industry is expected to be around 18% in five years (2023-2027).

 

The CEO, however, did not share the amount of investment they plan to invest to expand its operations, saying “this is confidential”. It also remains unknown whether the company is running in profit or not. Earlier, the company projected to hit breakeven in 2023.

The app-based food delivery business, which is now part of Germany-based Delivery Hero, is also working with home-based female chefs “to open their own online kitchen and offer home-cooked food,” Angele said.

The company launched the HomeChef initiative in Pakistan in 2021 and is said to have registered over 10,000 so far.

During his recent visit to Pakistan, the CEO said he met one of the biggest home chefs. She started out all by herself in her kitchen, started delivering five to 10 orders a day and now she is operating on three locations and delivering 300-plus orders every single day.

“It is amazing to enable those highly intelligent and motivated female entrepreneurs and at the same time of course good for customers, for our riders and of course for foodpanda as a company.”

Geographically, the company is operating in 35 major cities in Pakistan. “I see a lot of potential in customers who are very technology-savvy, who have also some disposable income.”

“Pakistan is really exciting because it is such a large and powerful country. Some 240 million inhabitants and the population keeps increasing and we really think…a lot of potential in Pakistan.”

At the moment, the economic situation is very difficult in Pakistan.  “We need to stick to our strategy, we stay committed to Pakistan,” he said. He revealed that foodpanda had increased compensation for its 50,000 riders after petrol prices spiked in Pakistan.

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