Uber Technologies has decided to buy Taiwan’s part of Foodpanda, an extensive food and grocery delivery platform, in a remarkable deal. This decision is a part of UberEats’ expansion plan in Asia, especially in Taiwan, to boost its market share.
Acquisition
Uber will acquire Foodpanda’s Taiwan branch from Delivery Hero for a massive $950 million cash. This acquisition highlights that Delivery Hero is still pulling out of the same market. Delivery Hero has long attempted to sell a package of its other operations across Southeast Asia.
Market Dominance and Synergies
Both Uber Eats and Foodpanda are the leading food delivery companies in Taiwan. From January 2022 to August 2023, Foodpanda had a 52% market share, while Uber Eats had 48%.
The agreement is assumed to generate synergies regionally. Uber’s wider selection in northern Taiwan and major cities, in contrast to Foodpanda’s dominance in southern Taiwan and smaller cities, complements the two companies.
Taiwan’s Growing Food Delivery Market
The Taiwanese online food delivery market is expected to reach around $68. 5 million by 2029, up from $51—3 million in 2024. The food delivery industry has experienced highs and lows, with startups finding it challenging to deal with unit economics and economies of scale issues. Concentration has been usual, with the players retreating to their home markets.
Uber’s Optimism
Pierre-Dimitri Gore-Coty, Uber’s Senior Vice President of Delivery, was very happy about the chance to provide more convenience and value to customers in Taiwan. The food delivery industry in Taiwan, which is already well-established, together with the fact that the island of Taiwan is very small, makes it a very attractive market for Uber.
Strategic Intent
Uber plans to build on the vast local operations that Delivery Hero and Foodpanda have established over the past years, investing more in improving the experience for customers, merchants, and delivery partners.
Through this decision, Uber wants to enhance its standing in Taiwan and take advantage of the wide coverage and relationships that Foodpanda has established with local brands. As the two merchants from Uber Eats and Foodpanda unite on a single platform, customers will be able to enjoy more food varieties and prices.
Conclusion
Uber’s purchase of Foodpanda’s Taiwan segment is wise in the fierce food delivery market. When the deal is closed, local consumers, merchants, and delivery partners will move to Uber Eats, thus changing the way food is delivered in Taiwan.
Image Source: Focus Taiwan
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