The company said the talks are at an early stage.
Foodpanda announced its most recent staff reductions, citing the requirement for it to be "more nimble." Delivery Hero has revealed discussions with several parties about a potential sale of its foodpanda enterprise in chosen Southeast Asia nations. The company has expressed that any conversations or plans are still in their initial phase.
Foodpanda on Friday declared to CNBC that they are taking steps to streamline their operations in order to become more agile, confirming its latest round of layoffs. This is the third iteration of job cuts the Singapore-headquartered food delivery service has made in the past year, due to macroeconomic headwinds. Grab and Deliveroo have also undertaken similar measures. Jakob Sebastian Angele, Foodpanda's APAC CEO, did not state the exact number or departments affected in a letter to employees. He did specify that organizational structures across regional and country teams are being reviewed, and that functional reporting lines are being shifted into different management for added focus.
Delivery Hero has said it is in talks with potential buyers to sell part of its Southeast Asian food delivery business. This includes its Foodpanda operations in Singapore, Cambodia, Malaysia, Myanmar, Philippines, Thailand and Laos.When contacted by CNBC, Delivery Hero confirmed that "negotiations with several parties regarding a potential sale of its foodpanda business in selected Southeast Asia markets" were in the early stages. German media outlet WirtschaftsWoche also stated that rival Grab could be a buyer, although Grab declined to comment.According to a report from tech research firm Momentum Works, competitor Grab is leading the market in terms of gross merchandize value in 2022, with 54%, while Foodpanda holds 19% and Gojek 12%. Sachin Mittal, head of telecom, media and technology research at DBS Bank, commented that rivals to Grab such as Gojek and Foodpanda are losing market share in comparison.
Food delivery players have been attempting to survive in spite of adverse economic pressures. Grab reduced expenses a few months ago as they concentrated on attaining profitability. Delivery Hero conveyed that their "emphasis remains on our long-term dedication to forming a fruitful, viable enterprise."
Since 2011, Delivery Hero has yet to become profitable. During the first half of 2023, a net loss of 832.3 million euros ($886.9 million) was reported, in comparison to a loss of 1.495 billion euros in the same period the prior year. Jonathan Woo, a senior research analyst from Phillip Securities Research, hypothesized that Foodpanda's potential sale of Southeast Asia businesses is likely due to market consolidation after intense competition, especially in light of increasing demands for profitability. According to Woo, only a few players in the region, such as Grab and GoTo, could manage the acquisition; however, he acknowledged that Grab, with its higher presence in the region compared to GoTo or Deliveroo, would be the most likely candidate. GoTo is the merged entity following Gojek, a ride-hailing and food delivery service in Indonesia, and Tokopedia's e-commerce venture. In December 2021, Foodpanda proclaimed its withdrawal from the German and Japanese markets. Both Grab and Foodpanda have been branching out to dine-in services as people resume their customary activities and dine in more often.
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