Around the world, in the competitive food delivery category, the win condition is shifting. Where in 2020 and 2021, the goal was to capture the largest market share, now the stakes are rising. On a call with analysts Wednesday (Jan. 12) discussing its fourth-quarter 2021 financial results, delivery giant Just Eat Takeaway shared that its goal now is to outperform rivals to the point where they bow out completely.
“There are still players in markets in which I believe they have a [challenging] position, so I would encourage them to leave those countries, but they are not leaving those countries thus far,” Just Eat Takeaway CEO Jitse Groen told analysts. “We do expect some of that to happen in this year if the current rotation in the market continues to happen. I think that’s going to be beneficial to us because — we’ve seen that in Spain — if a competitor leaves the country, obviously you grow a little bit in market share.”
Recent moves suggest that competitive markets are in fact thinning out. In December, it was reported that Delivery Hero’s Foodpanda unit is exiting six German cities and selling its Japanese Foodpanda division. In the past week, news broke of Uber Eats’ upcoming exit from Brazil and Delivery Hero’s decision to sell of most of its stake in Latin American delivery firm Rappi.
Read more: Delivery Hero Leaves German Cities and Japan, Citing Competition, Driver Shortages
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Now, for Just Eat Takeaway, the goal is to grow large enough to leave no room for other delivery services to operate.
“You need scale in a market. For instance, if we have scale in the Dutch market, we suck all the oxygen out of that market because there’s only a limited amount of new use available and you are all after the same reuses,” Groen told analysts. “In most of the markets that are, say, smaller than the US, this leads to there being one big player, because there is no more oxygen in the market for anybody else.”
Additionally, one of the key ways that Just Eat Takeaway, like its competitors, is looking to drive more value from its existing logistical network is through grocery sales. As it stands, the company delivers from more than 13,000 grocery and convenience stores internationally, including Kroger, Shell and 7-Eleven.
In December, the company entered the ultra-fast grocery delivery space in the United Kingdom and Canada, delivering within minutes from grocer Asda and convenience store One Stop in the former and from its in-house SkipTheDishes Skip Express Lane grocery and convenience stores in the latter. These launches come as, around the world, tech giants and emerging startups alike arrive in major cities promising 10-15-minute deliveries enabled through their dark store networks, driving up consumers’ expectations of on-demand convenience.
“The encouraging thing about Canada is that the first stores are doing hundreds of orders a day so it’s looking pretty good,” Groen said. “In the UK, we have now announced two deals. There will be more, and it will be a slow start, I guess, for all of these brands, but we’ll see quite some traction by the end of the second quarter.”
If Just Eat Takeaway can take the lead in the ultra-fast delivery category, it can further differentiate its offerings from competitors in the markets in which it operates, getting that much closer to emerging as the sole category leader.
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