DoorDash Inc., already the top restaurant delivery company in the U.S., is now looking to strengthen its presence abroad.

The San Francisco-based company operates in 28 countries outside the U.S., mostly in continental Europe, Japan and Australia. Yet it doesn’t dominate any of those markets the way it does in the U.S., Chief Executive Officer Tony Xu said in an interview.

“We’re not very well penetrated in any one of those countries,” Xu said. “The growth is there, and our unit economics are improving, but we have a long way to go when it comes to matching the penetration levels of our US marketplace.”

The bulk of DoorDash’s overseas markets are in more sparsely populated European countries like Sweden, Estonia, Denmark and Iceland, which it entered through its purchase of Finnish food-delivery company Wolt Enterprises two years ago.

While there has been speculation that DoorDash could be interested in acquiring struggling UK peer Deliveroo Plc to feed its global ambitions, Xu said “our hands are pretty full right now to make sure that we do a great job” in its existing overseas markets, which don’t include the UK or France.

Europe’s biggest food delivery companies, including Deliveroo, Germany’s Delivery Hero SE and Turkish startup Getir, have yet to prove to investors that they can turn a profit, and have struggled as demand for delivery faded from pandemic-era levels. Across the industry, companies that promised ultra-fast delivery of everything from perishables to medications in Europe are cutting costs and consolidating.

Xu said during last November’s earnings call that there is more work to do in its Eastern European markets in particular to upgrade technology, acquire more customers, and partner with more merchants.

DoorDash is looking to invest its cash pile not only overseas but also in its non-restaurant businesses like grocery delivery, which has outpaced the growth of its core restaurant delivery business.

On Wednesday, DoorDash announced it’s adding a new grocery partner, Royal Ahold Delhaize NV, which owns Stop & Shop and Hannaford. The agreement will bring nearly 2,000 of Ahold Delhaize’s US grocery stores on the East Coast onto DoorDash’s delivery platform.

That adds to the more than 100,000 non-restaurant stores DoorDash has partnered with for on-demand delivery, Xu said.

The new deal could cut into the market share held by online grocery delivery rival Instacart, which has more than 80,000 retail stores on its app and previously had an exclusive relationship with Ahold in the US. Since DoorDash and Uber Technologies Inc. began building out their grocery delivery offerings in recent years, they have managed to siphon away last-minute or smaller basket grocery purchases from Instacart thanks to an established, loyal user base for their existing restaurant meal delivery services.

The partnership taps into a new type of customer, one who may add on a few convenience-store items to a DoorDash restaurant takeout order, rather than use Instacart or Ahold’s e-commerce sites for weekly, bulk grocery purchases, according to JJ Fleeman, CEO of Ahold Delhaize USA.

“We believe that the partnerships that we’ve created with Instacart and now DoorDash extend that customer base and gain a level of incremental sales for us,” Fleeman said.

DoorDash’s three-year-old grocery delivery business doubled in gross order value in the third quarter last year. Small orders have taken up an increasing share of overall online grocery purchases since the pandemic, according to data compiled by research firm YipitData, which analyzes customer email receipts. DoorDash reports fourth-quarter results next week.

Copy the Story Link

« Previous

Maine, 8 other states sign agreement to boost production of heat pumps

Next »

DEA reverses decision stripping drug distributor of licenses for fueling opioid crisis