Is Hong Kong ready for food deliveries by drone? Foodpanda talks up full automation and new markets
Co-founder and chief executive officer Ralf Wenzel says reliance on motorbikes ‘like something out of the 80s’ and has watched the tests of drone deliveries in Singapore ‘very carefully’
Fancy having some tasty food delivered by drone to your high-rise window?
It may not quite work like that, but online delivery company Foodpanda hopes to become one of the first takeaway services to start using drones to deliver orders. The start-up wants to be fully automated after becoming operationally profitable in all its markets in February.
Ralf Wenzel, co-founder and chief executive officer of the company backed by Frankfurt-listed Rocket Internet, said the current reliance on motorbike deliveries felt like something from the 1980s.
“The delivery of the future is not only being taken out by walkers in the street, or people driving motorbikes,” he said.
“We did the test with drones in Singapore and we are following [the technology] very, very closely.”
He admitted drone deliveries would be subject to local government regulations and the process by which drones would pick up and deliver orders would have to be examined.
Foodpanda joins Amazon in looking to deliver goods by unmanned drones as the e-commerce giant plans to use the technology to send out packages in 30 minutes or less under its Amazon Prime Air service.
Amazon has promised its “future delivery system” will fly up to 2.3kg packages on vehicles weighing 25kg that will operate at heights below 400 feet.
Apart from bureaucracy and government regulations that have been slow to make room for new technology, short drone battery life and limited payloads may prove to be a challenge to air delivery plans.
Euromonitor International estimates the food delivery market in Hong Kong covering non-seating outlets will be worth HK$423.2 million (US$54.43 million) this year, while Foodpanda’s sister company, Foodora, claims the market has already hit HK$2 billion.
Foodpanda launched in the city in June 2014 and was joined late last year by London-based Deliveroo, which Wenzel said had helped boost growth as customers became more aware of online delivery options.
The software engineer said the company became operationally profitable in all the countries it operates in for the first time last month.
“February was the first month where across every single country we’ve been operationally profitable; that means we have been positive margin after all operating costs, after all delivery costs, after all call centre costs and payment costs,” he said.
According to investor Rocket Internet, Foodpanda was globally profitable as of the third quarter last year and had a gross profit margin of 93.2 per cent.
Wenzel said there were no plans to cut more staff in Hong Kong after the company laid off around 15 per cent of its employees in February, citing greater automation of the ordering and delivery process.