The American food delivery app DoorDash was launched in Japan, marking the company’s first foray into the Asian market and the latest move by a large delivery group to expand globally with the goal of ‘exploit a boom in demand triggered by a pandemic.
DoorDash, the US market leader, said the move would give it access to one of the “most restaurant-dense countries in the world,” even if it starts out relatively small.
Mimicking his US strategy, where he initially focused on suburban areas outside of major cities, DoorDash said it enlisted “hundreds” of restaurants in Sendai, a city north of Tokyo with a population of around. 1 million inhabitants.
“It’s a very underserved market,” Managing Director Tony Xu told the Financial Times on Tuesday, describing Sendai as a “microcosm” of the country as a whole. “Nationally in Japan, based on what we’ve seen, the most generous estimates indicate that 10% of traders are adopting delivery. So I think it’s only the first few days.
The restaurant culture in Japan means that people tend to stop and eat on the way home, rather than ordering food for delivery, but entrants see an opportunity in the growing population of retirees and retirees. dual income families.
The move came as large delivery app companies aggressively expand into new markets, betting that the habits formed during lockdowns linked to the pandemic will become permanent. At the height of the foreclosure measures in the United States, DoorDash’s revenue jumped more than 200%, prompting it for a successful initial public offering that raised nearly $ 3.4 billion for the company.
Last month, the FT announced that DoorDash was preparing to launch in Germany, another hotly contested market that will pit the company against Just Eat Takeaway.com and Delivery Hero as well as Uber Eats, which said in April that it planned to launch into Europe’s largest economy in a few “weeks”.
Meanwhile, through its acquisition of Grubhub, which has not yet been finalized, Just Eat Takeaway will establish its first presence in the United States, putting DoorDash’s US market share at risk of over 50%.
In Japan, DoorDash will come up against familiar opponents as well as established local players.
“It will certainly be very difficult,” said Xu. “When we talk about an investment like Japan, we are talking about a multi-year type of investment, over ten years or more.”
Uber Eats was launched in the country in 2016, followed in 2020 by Delivery Hero and Chinese Didi Chuxing. Demae-can, headquartered in Tokyo, has partnered with nearly 60,000 merchants and has 5.82 million active users. It also offers a wider range of services, such as mail order and dry cleaning.
DoorDash will also face a range of powerful local businesses in adjacent markets, including grocery delivery co-operatives and Yamato and Sagawa parcel services.
As DoorDash began to expand into convenience stores in the United States, Xu said he would not be rushing to take similar action in Japan.
“It’s crawling, walking, running,” he said. “We absolutely don’t want to make any mistakes by just trying to copy and paste what we’ve seen working in other geographies. I think for us we’re going to have to build a very Japanese product.
