Foodpanda partners Cold Storage operator DFI for grocery delivery
The company’s quick-commerce business could eventually be as large as its food delivery offering, says its Singapore CEO
FOODPANDA on Thursday (Sep 7) inked a partnership with DFI Retail Group – which runs the Cold Storage, CS Fresh and Giant supermarkets – to provide grocery delivery services in Singapore, promising delivery times of under an hour and no price mark-up.
The partnership comes as foodpanda continues to invest in “quick commerce” (q-commerce), or on-demand delivery of groceries, including fresh produce, and convenience items. Its existing retail partners include convenience store 7-Eleven, as well as health and beauty stores Guardian and Watsons. At Thursday’s event, foodpanda also signed a partnership with the yuu Rewards Club to offer consumers points.
The DFI partnership represents an asset-light approach to q-commerce, as foodpanda relies on retail stores’ inventory. At the same time, the company also employs an asset-heavy approach by operating delivery warehouses, dubbed “pandamarts”. There are 12 in Singapore, according to foodpanda’s website.
The DFI partnership does not indicate a shift away from pandamarts. Instead, foodpanda sees it complementing the warehouse model, as demand for grocery delivery continues to grow post-pandemic, according to the company’s Singapore chief executive Lawrence Wen.
Wen, who was appointed to his current role in 2022, joined foodpanda from rival Grab’s Indonesia business, according to his LinkedIn profile.
“We actually see groceries becoming a bigger and bigger part of our overall business. I believe that both the asset-light model and the asset-heavy model fit nicely into this new environment that we’re in,” he told The Business Times.
He estimated that foodpanda’s business currently comprises 80 per cent food delivery and 20 per cent q-commerce, going by gross merchandise value. With the continued growth of the latter segment, this split could eventually become 50:50 in the long run, Wen added.
Foodpanda is up against stiff competition in the grocery delivery space from rivals Grab, Amazon Fresh and Lazada-owned RedMart, which Wen said keeps foodpanda “on our toes”. Grab has previously named Indomaret in Indonesia and Big C in Thailand as some of its q-commerce retail partners.
Founded in 2012 and headquartered in Singapore, foodpanda operates across 12 markets in Asia-Pacific. It was acquired by Germany’s Delivery Hero in 2016.
Regulatory filings of foodpanda’s Singapore entity indicate that the company posted S$66.8 million in losses for the year ended December 2021, on the back of S$269 million in revenue. Like other tech companies, it laid off staff in the past year, citing a “critical need” to cut costs.
Wen said the company at present still has open roles, and is also seeking to expand its delivery rider base in Singapore, where it has over 10,000 gig workers. “It is a tough year, overall in terms of the tech environment, but we are cautiously optimistic about the future,” he said.
