UberEats hungry for a slice of Hong Kong’s food delivery pie

Rivals foodpanda and Deliveroo play down threat and say competition will spur business in rapidly growing market

PUBLISHED : Thursday, 25 August, 2016, 11:01pm
UPDATED : Friday, 26 August, 2016, 9:25am

The city’s food delivery market is set to heat up with fiercer competition as popular ride-hailing app Uber pushes ahead with plans to launch “UberEats”.

The firm has started a recruitment drive for a range of managers to debut its food delivery service in Hong Kong.

Kenneth She, head of operations at Uber Hong Kong, revealed earlier that the firm was eyeing a slice of the HK$2 billion market pie and looking to develop a new app.

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UberEats made its Asian debut in Singapore in May after tapping the market in 14 other cities in the US, Australia, Canada and France. In Singapore, UberEats promises a delivery time of 35 minutes with a S$3 (HK$17) charge, which is waived for now to attract more customers.

However, major market players foodpanda and Deliveroo did not seem too worried about the potential challenge, saying more competition would help spur business growth.

Alexander Roth, managing director of foodpanda’s local operations, said more market players would help increase public awareness and patronage of online food delivery services.

“This is a relatively new concept in Hong Kong,” Roth told the Post, saying “more rivals mean more opportunities”.

“With the entry of new players to the market, we can take our education efforts a step further to demonstrate how the trend of online food delivery is picking up and getting more public attention,” he added.

Foodpanda launched in Hong Kong in 2014, offering menus from more than 1,000 restaurant partners, with about 400 delivery staff on hand. It reported more than 500 per cent growth in orders last year, and 450 per cent so far this year.

Roth said downloads for the foodpanda app had exceeded 450,000 and 70 per cent of transactions were completed via the app. Despite the possible threat of UberEats offering cut-rate prices, Roth said they had a bigger vision for foodpanda, which provides free deliveries and relies on commissions paid by restaurants.

“We do not concentrate on competitors ... We do our best to be a great partner to restaurants, not just a delivery provider or transactional platform,” he explained. “We are committed to really help them improve their business, not just generating quick additional revenue.”

More competition can help spur market growth and raise customer awareness
Brian Lo Ka-chung, Deliveroo

Roth added that each employee, including himself, had to take turns to make deliveries.

Brian Lo Ka-chung, Deliveroo Hong Kong’s general manager, agreed that more competitors would spread the message about the convenience of ordering restaurant food via an app.

“In the past, Hongkongers didn’t realise that they could use an app to make delivery orders. More competition can help spur market growth and raise customer awareness,” he said.

Deliveroo launched in November last year with a delivery charge of HK$20 for every order and commissions paid by partner restaurants. Lo said the firm had enjoyed 40 per cent monthly business growth since the second quarter this year.