Foodpanda Pakistan grows 100% since August 2014

Foodpanda has been making headlines lately, so we decided to sit down and chat with the people behind the company


Babar Khan March 03, 2015
Foodpanda team. PHOTO: Babar Khan Javed

In the last quarter, Foodpanda has been following through on global directives to acquire their close regional competitors, taking over companies like 24h (UAE), Talabat (GCC), JustEat (India), and EatOye in Pakistan.

EatOye’s acquisition, which created headlines in the local tech space, would undoubtedly raise interest among others to enter the same space hoping for an exit-strategy of acquisition.

Read: Food Panda takes over Eat Oye!

We were curious about the acquisition criteria, the business’ measurable performance and the adoption strategy to tap into the 85% non-delivery channel.

Here’s our interview with Foodpanda Pakistan’s managing directors, Talha Ansari and Ahsan Mateen.


Talha Ansari and Ahsan Mateen. PHOTO: Babar Khan Javed


Q. Of all the players in your space, why acquire EatOye?

EatOye’s market penetration strategy involved offering single digit percentages for restaurants acquired. Our restaurant-clients raised this concern with us often. After us, EatOye had the biggest market share in the delivery channel. So this acquisition opens room for higher margins and long term success for Foodpanda.

Read: Food businesses look for a slice in the Rs15b home-delivery market

Q. After the WhatsApp acquisition, we witnessed several copycats emerging. Can you share what made EatOye acquisition worthy, compared to others in the market?

After us, they had the highest market share and they were getting in the way of our higher margins end game.

Q. This has to be one of the toughest spaces to be in with weak end margins and low expectations for ROI. Why, despite this, would you consider Foodpanda to be a great investment?

Everyone needs food to survive and every single day we have the opportunity to earn. Our application is now being used for online payments and because 65% of the orders come through it, it’s making us the first M-Commerce website. We've achieved a 40% re-ordering rate with nearly 80% of the daily orders coming from an existing user base.

Read: Foodpanda consumes EatOye on way to summit

Q. You're an online business using offline channels. What would you consider your top marketing mediums for awareness and conversions?

Our customer acquisition strategy includes discounts, festivals, Karachi Eat Festival, signposts, restaurant activation for customers to experience "how to order" and a student ambassador program.

Read: The burger business: Mouth-watering opportunity

Q. And what's been the return? What's your stake in the delivery with online leads channel?

The current market scope suggests that Pakistan has the potential and nearly half the prospective user base is untapped. We guesstimate that we are processing roughly 8-9% of the delivery channels orders in the country. We're proud to share that since August 2014, our business has grown 100%.

Read: Fast-food business: Some spice left in Mr. Burger

Q. The analytic's portion of your data and the inadvertent knowledge of high demand categories gives you a significant advantage as an value added partner to the food industry. What, in your experience as Foodpanda, are the top food industry trends in Pakistan?

Delivery and take-away businesses thrive in Karachi. Lahore has more of a dine-in culture and Islamabad is both, it’s a hybrid of Karachi and Lahore.

The highest demanded item, based on our experience thus far, is the chicken tikka pizza with an average order value of Rs1,000. The second is fried chicken with an average order value of Rs600, followed by organic or ‘healthy’ items with the average order value of Rs500.

Read: Food portal: Breaking stereotypes, one meal at a time

Q. Google released a report last year that said that 95% of the apps created have no engagement after downloading. It seems many food businesses are eager to create transaction focused apps. Why should they do so?

The process is not that simple, to create an app and then expect results. The app must do more than transact, it should connect with a cause that the user cares about. People want something different to eat every day, and we are a one window solution.

Q. With 125k application downloads and 40% engagement, you could get into location based advertising to drive footfall into your customer's outlets. Dine-in makes up roughly 85% of the food transactions, so why haven't you done so?

This idea is entirely dependent on the infrastructure of the country it’s being executed in. We could do it when 4G truly does what it’s supposed to, and alpha and beta tests reveal that it can work.

Read: Digital economy: Foodpanda eating its way into online ordering business

Q. Any plans to replicate the business model of Foodem.com?

Rocket Internet is doing this in Australia with Hello Fresh, but we have no plans at the moment to do such a thing in Pakistan.

Q. Finally what’s the 2015 agenda?

We are in talks with some mobile device companies to have our application pre-installed on their devices, and to leverage our dataset to work with new and existing food businesses to provide area coverage reports, advice on good deals based on consumer interests, and the peak hours for various food categories.

COMMENTS (2)

Anonymous T | 8 years ago | Reply I would suggest everyone to be extra careful whilst ordering at Food Panda. A better option is to do a take away or get food picked up yourself. This company is much hyped about, but fails in most aspects. Delivery time is always over 1.5 hours (min), food delivered is not up to standard (so you're pretty much stuck with the wrong or bad food) and their service is overall flawed. If you want my two cents, try an alternative method. Thanks.
Zahir | 9 years ago | Reply Fantastic job Ahsan and co. Keep up the good work !!
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