Food delivery war rages amid global COVID-19 lockdowns
Nikkei -- Aug 23
With food deliveries expanding fast worldwide as people stay home amid the coronavirus pandemic, three players' growing dominance is realigning the industry in the United States, Japan and elsewhere.

According to L.E.K. Consulting, the food delivery market in the U.S. was worth $53 billion in 2019 and is expected to grow to about $88 billion by 2023. DoorDash, which has bought rival Caviar for about $400 million, now has the largest market share at about 45%, according to Edison Trends. Uber Eats, which has the second-largest share at 28%, announced in July it will buy Postmates, whose 7% share puts it fourth. The Netherlands-based Just Eat Takeaway.com has announced it will acquire Grubhub, ranking third with a 17% share.

In China, Meituan Dianping is an unchallenged leader with a 70% share. The IT company is attracting attention as an emerging platform like Alibaba Group Holding and Tencent Holdings. Its strategy centers on a "superapp" that performs multiple functions, such as reserving hotel rooms and finding private lodging in addition to ordering food.

In Southeast Asia, superapps have a unique ecosystem in which food delivery services evolved from ride-hailing apps, including Gojek's GoFood in Indonesia and Vietnam's GrabFood. The common use of motorcycles in these countries makes it easy for the services to find workers who can reach houses even in narrow alleyways.

In Japan as well, competition is heating up as the market grows. Uber Eats, operated by Uber Technologies, has gone on the offensive with the introduction of a fixed-rate service. Domestic player Demae-can and other startups are making their presence increasingly felt by focusing on premium and popular restaurants and hiring higher-quality delivery staff.

Demae-can became an effective subsidiary of Line in April.

"What we set out to do in five years we can now do in just a year," a Demae-can insider said.

Line, which acquired about 20% of the operator of Demae-can in 2019, invested another 30 billion yen ($280 million) to make the company a subsidiary. Hideo Fujii, a Line executive officer in charge of its delivery business, became president of Demae-can in June, and Line has dispatched 50 IT engineers to the new subsidiary. The company plans to integrate its Line Delima food delivery service with Demae-can's under the Demae-can brand name and to make it easier for users of the Line app to register for the service. Line aims to take full advantage of its technology and ample funding to enhance the service's ease of use and expand delivery offices.

The Line app has 84 million registered users and potential customers for the delivery service, which the company is positioning as the core of its strategy of providing wide-ranging services for people's lives through a superapp.

News source: Nikkei
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