E-commerce growth prompts foodpanda expansion till 2019

THE foodpanda Group plans to expand into six more cities until 2019 as it tries to catch up with the fast-growing e-commerce market in the country.

“By the end of the year we’re looking at three cities. Next year, I’m not too sure on which quarters, but we’re looking to add six more. For next year, we’re looking at Luzon, Visayas and Mindanao. Although we have Davao na (already), we’re looking at other Mindanao areas,” Cheena Abellon, the marketing head of foodpanda.ph, told BusinessWorld in an interview at the ShopFest e-commerce forum held in Taguig City.

The initial three cities to open this year will be concentrated in Luzon, said Ms. Abellon, who declined to specify the locations.

foodpanda currently has seven delivery centers spread in the cities of Makati, Mandaluyong, Manila, Pasig, Quezon, Cebu and Davao.

To date, it has around 900 restaurant partners on board and expects to hit the 1,000 mark by year end.

For its logistics fleet, foodpanda is nearing 1,000 motorcycles and bikes, which are expected “to double or triple” alongside its expansion plans.

Ms. Abellon described 2018 as a “really, really good year for growth,” although declining to give figures.

She cited its new partnerships with several brands, including fastfood giant McDonald’s, as profit drivers for the year. Soon, foodpanda will be announcing more partnerships, including a “huge” casual-dining food brand that trends online.

Towards the end of the year, the platform will be exhausting “a lot” on marketing efforts.

“You can expect a lot of visibility [for foodpanda],” Ms. Abellon said, noting that the firm will go heavy in social media and event participation, among others.

Part of this marketing campaign is putting up its first popup store, possibly in high-traffic commercial areas like central business districts, by the last quarter of the year.

“It’s a way for us to work with partners and allow them to explore opportunities in places they are not present. It’s campaignbased but may be, if it works out, it can be for the long term... We want to have a point of sales, something that people can actually touch and see rather than go through online,” Ms. Abellon said.

NEW DIGITAL SERVICES Prashant Kala, country head of ShopBack Philippines, recognized the rapid pace at which e-commerce is expanding in the country.

“In the Philippines, we see a lot of local e-commerce getting very strong. It’s the most dynamic country in Southeast Asia today,” Mr. Kala said in an earlier interview.

The foodpanda marketing chief noted the same. However, Ms. Abellon said the Philippine market still needs a “bigger push” to be more receptive in new technologies to avoid lagging behind Southeast Asian neighbors.

“Philippines is fast growing but it’s not a mature community yet. It’s not a mature market because everything is like new to us,” Ms. Abellon said, comparing the country to Singapore where foodpanda has a 10,000-delivery fleet.

“We have a strong penetration in social media but when it comes to the way we receive servicerelated or shopping-related [platforms], it kind of takes a while. But it’s fast growing,” she added.

Ms. Abellon said more restaurants are seeing the benefits of food delivery services in reducing their cost and gaining a higher online presence.

“They see it in two ways,” she said.

It can be a marketing channel for them and at the same time, the high operational cost of call centers for overhead and motorcycles may be prompting them to explore a partnership with delivery services, she added.

Owned by Berlin-based Delivery Hero SE, the foodpanda group operates in 51 countries. In the Philippines, foodpanda was launched in June 2014. —