23 Dec 2019
Posted in Consumer
Food delivery app Woowa helps Delivery Hero to expand leadership in Asia, says GlobalData
Germany-based Delivery Hero has recently agreed to buy South Korea’s top food delivery app Baedal Minjok operator Woowa Brothers Corp. for about US$4bn. The acquisition is in line with Hero’s strategy to expand leadership in the Asia-Pacific (APAC) region, says GlobalData, a leading data and analytics company.
According to GlobalData, hyper-connected and time-scarce consumers seek out ultra-convenient and restaurant quality meals at home fostering the growth of APAC food delivery market.
The share of Asia in the global foodservice delivery market is expected to grow by 4% by 2021. The number of transactions in delivery takeaway market in APAC stands at 14.6 billion in 2018 and is expected to reach 18.6 billion by 2022. Time-pressed consumers, especially among single, young urban consumers and dual-income households, are increasingly driving for convenience in foodservice.
Shagun Sachdeva, Consumer Insights Analyst at GlobalData, says: “The calculative move by Hero comes at a time when the European foodservice (delivery) market has become hyper-competitive and triggered a wave of strategic consolidation and rising valuations. For instance, Delivery Hero sold its German operations to Takeaway.com NV in 2018 and now Takeaway is in a bidding war with Naspers Ltd. spinoff Prosus NV for British app Just Eat Plc.
“On the other hand, Delivery Hero’s food delivery app Yogiyo is second behind Woowa’s Baedal Minjok in South Korea. However, Woowa faces stiff competition from rivals such as Coupang. The transaction intensifies the competition between Delivery Hero and the region’s big incumbents, including Japan-based SoftBank-backed Grab and Indonesia’s Go-Jek.”
South Korea, with a huge population and high Internet penetration, is one of the world’s biggest online food delivery markets. However, the market is still nascent and expected to grow fast.
An analysis of GlobalData Market Analyser reveals that 813.1million transactions happened in terms of delivery takeaway in South Korea and is expected to reach 942.5 million by 2022.
Shagun concludes: “Buying Woowa will undoubtedly allow Hero to expand its footprint in Asia and solidify its position as the largest global food delivery platform outside of China.
“Woowa Brothers generated approximately 100 million orders in Q3 2019. With a wider customer base and longstanding brand presence in South Korea, Woowa will help Delivery Hero in achieving its Asian expansion ambition. At the same time Woowa, operating under the ‘Baedal Minjok’ brand, can revive its growth and take a shot at its rival Coupang.”