Last week, Uber announced the acquisition of DeliveryHero’s Foodpanda operations in Taiwan, for US$950 million. 

Some thoughts (and facts):

  1. It is not a bad deal for DeliveryHero, who would receive US$950 million in cash for the transaction, and another US$300 million investment from Uber into the group. That will significantly improve DeliveryHero’s net cash position, currently at €1.8 billion (US$1.95 billion) prior to the deal.
  2. We argued a while ago that Foodpanda should probably divest all their Asian operations and focus on Taiwan instead. It seems that they have decided to do exactly the reverse: keeping the rest while selling Taiwan; 
  3. They probably did not have a better choice. We know that DeliveryHero had tried but failed to sell its Southeast Asia operations (both Meituan and Grab refused to buy, and talks with LineMan Wongnai over Thai business probably went nowhere). It is understandable, whoever who takes over Southeast Asia business will have to manage the complexities of fragmented markets, reverse declining market share, and somehow find a way to become profitable; 
  4. The Taiwan market, on the other hand, is valuable. Its economy is half of that of Indonesia (and bigger than any other country in Southeast Asia), and its GDP per capita is only behind Singapore (and almost thrice that of Malaysia). More importantly, it will not face any immediate threat from Meituan (as Foodpanda Hong Kong is facing), for obvious reasons;
  5. Uber and Foodpanda have been the duopoly in Taiwan’s food delivery market for a while, with actually very complementary businesses. According to our friends at Measurable AI – Foodpanda has a slightly higher market share at 52%, due to the higher order volume (AOV is very similar, at US$9-10 levels);
  6. Also, Uber is stronger in bigger cities and the (relatively more) cosmopolitan Northern part of Taiwan; while Foodpanda is more popular in smaller cities and the South. According to Measurable AI, more than 40% of Uber’s users use the app in another language that is not traditional Chinese (the language of the majority of Taiwan’s population), while >99% of foodpanda users use traditional Chinese;
  7. DeliveryHero could have beaten Uber and dominate Taiwan. It had a competent GM (John Fang, who recently replaced disgraced Jakob Angele as regional CEO), and would have sufficient management attention and resources (if it did not invest in operations in places like Laos and Pakistan). Alas, that did not happen;
  8. As a group, DeliveryHero’s most valuable businesses are what they have acquired in South Korea, Saudi Arabia and UAE. Baemin in South Korea delivers more than 70% of the group’s GMV in Asia; HungerStation in Saudi Arabia and Talabat in UAE are market leading. All three have been profitable but now face current or potential competition, from Coupang and Meituan’s KeeTa respectively;
  9. Would be really interesting to watch what DeliveryHero will do with its “rest of Asia” business. Some investors and analysts also asked us whether Uber would take a further step to acquire Foodpanda in Southeast Asia. Well, why would they if they already have the exposure of the winning player in the region, which is Grab? (Uber owns 13.6% of Grab) 
  10. As for the risk of owning a business in Taiwan amid the current tensions across the Taiwan strait, we think at least the potential of war is small. But judging from the inauguration speech of Taiwan’s new president yesterday (20 May), a lot of turbulence is to be expected.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.