
Who Is Winning the Food Delivery War? - ryan_j_naughton
https://priceonomics.com/who-is-winning-the-food-delivery-war/
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ian0
A tangent - but I live in Jakarta, Indonesia. Here around 2 years ago a local
motorbike ride-sharing startup called Gojek so ago switched on a service
called go-food. There legion of drivers would now pick up any food from any
restaurant you wanted and drop it to you.

It killed most food delivery startups within a few weeks, they have since
expanded the service to allow pickup of pretty much anything. Supermarkets,
convenience stores, toyshops, pharmacies, pet-shops, hardware. Theres even a
generic option to buy "something" from a shop at "address".

Its pretty easy to look at this and think this is the end-game in developed
countries too. For at least those purchases where convenience and timing is a
factor and cost not as much. All these disparate products are actually a very
similar UX and solving the same problem.

Regular grocery shopping behaviour (or the startups running deliveries) hasn't
been much effected, presumably as its a more bespoke use case.

~~~
foobiekr
In the dotcom there was a famous example of arbitrary shopping-deliver-as-a-
service called Kozmo.com. The problem in western countries is that the wages
for delivery cannot possibly work for the way people use such services. It's
not even clear this will work well for restaurants outside of specific
affluent areas.

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Aqwis
> On average, customers go to physical grocery stores 3.2 times per month

This seems crazy to me -- not only must be purchases be _enormous_ , but fresh
meats and vegetables don't keep for 9 days between each visit. Am I missing
something?

~~~
kelnos
That doesn't sound that weird to me. Two things:

I expect most people aren't shy about buying several weeks worth of meat and
freezing it. Quality doesn't drop off _that_ much. Quality differences are
more noticeable with frozen vegetables, but I suspect a lot of people are fine
with those too. Then there are frozen microwave/oven dinners and things like
that, as well as non-perishable/shelf-stable items.

A household that exclusively cooks all their meals might make 7-10 grocery
trips per month, but I expect that most people don't do that, and even those
who cook all their meals probably don't rely on fresh meat & veggies for every
single meal. And note that they don't cover people who go out to eat at
restaurants at all in that list, so they're not accounted for anywhere.

On a side note, regarding your surprise at the purchases being large: most
Americans, especially those who live in rural or suburban areas, don't do the
kind of daily or near-daily stops at small convenience stores to pick up a few
quick things that you see in dense cities. They drive to the grocery store,
load up as much as they can fit in their cart, fill up their car, and go back
home.

~~~
bayonetz
On the frozen meat point, I'd bet large sums of money people can't distinguish
between fresh and frozen-within-3-or-so-months meat. In fact, frozen meat can
be reliably made even tastier than fresh if you cook it straight fron the
freezer with no thaw. It's a cool little hack really. By cooking from frozen
you get more time to sear, char, and crisp the outside of the meat while the
inside doesn't overcook. It's next to impossible to get the right mix of
seared/charred outside but tender lightly cooked inside with the normal
thickness stock cuts (~1inch) you get at grocery stores. With frozen, can do
it no problem everytime. On that note, another trick, if you must cook without
freezing, is to just get a custom thickness cut. For example, I need a 2-3inch
NY strip if I want to grill straight from the refrigerator and get the right
outside to inside done-ness.

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tyingq
Pizza and chinese restaurants are likely dominating the food delivery war in
the US. They don't seem to be considered in this study.

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contingencies
In China there are a heap of last-mile delivery providers, but only two clear
winners with national coverage: [http://ele.me/](http://ele.me/) and
[http://waimai.meituan.com/](http://waimai.meituan.com/) ... statistics of
recent but nebulous origin claim Ele.me (Alibaba-backed) has 55% (42% + 13%
after acquiring Baidu Waimai last month) and Meituan (Tencent backed) has 41%
of the national market. (I would regard these figures suspiciously.)

Overall the finished meal delivery concept has proven very popular with
Chinese consumers, probably because of growing working hours, smaller
families/living situations and worsening traffic.

The government recently announced rules for the delivery sector's employees
including no right to enter private premises, requirement to be punctual,
requirement to be quiet and respectful, etc.

In terms of Asian regional providers, Food Panda has pretty good traction in a
few countries and there are a number of smaller startups in most Southeast
Asian markets, though none we are aware of with fundamentally unique models.
Uber Eats and Deliveroo are trying to get in to some markets like Hong Kong.

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sutee
I feel like Food Delivery is a place where competition may actually have
driven up prices for the consumers. I was gone from SF for two years and when
I came back to the same neighborhood, I felt that food delivery became more
expensive because of DoorDash, etc.

Places that used to not charge delivery fees now do, maybe because now they
realized they could? Or because they have to compete for delivery people.
Also, some apps now charge a 20% default tip. It is not rare to get three
types of fees on top on one delivery order, even for something simple as a
burrito.

~~~
in_cahoots
Don't forget the price markups! If you compare prices on Doordash or Yelp vs
restaurants' websites you'll often find that the prices themself are 10-20%
higher.

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clearly
In the US can you not order food for delivery directly from supermarket, same
for restaurants?

I would have thought in the UK Tesco, Sainsburys etc do as well as any
delivery only services (Ocado, Amazon Fresh etc).

I would have guessed direct restaurant orders are as large as justeat/uber
eats style services. They would certainly deserve a place on the pie chart...

I also dont believe the average US consumer spends $105/month on meal kits...

~~~
eadmund
> In the US can you not order food for delivery directly from supermarket,
> same for restaurants?

I think it's available in larger, older cities (e.g. on the East Coast), but
in the rest of the country it's a lot rarer. I think maybe it's much the same
reason we no longer have bellboys, ushers or elevator attendants: minimum wage
& payroll taxes rose to the point that it wasn't cost-effective for grocers or
customers.

~~~
DanBC
In the UK we have higher minimum wage, and higher petrol duties, and yet we
manage to have extensive supermarket delivery.

And it's been happening for many years - the first "online" shopping from home
happened in the UK, from Tesco, in 1984.

[http://www.bbc.co.uk/news/magazine-24091393](http://www.bbc.co.uk/news/magazine-24091393)

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theodorewiles
Just remember - if you don't want your data packed up and shipped off for
marketing purposes, don't apply for a loan from Earnest :)

~~~
nerdponx
Seriously. It's one thing to conduct the analysis in-house and sell the
results, it's another to just sell the data outright.

~~~
bayonetz
I don't think they sold it though. This is Priceonomics thing now -- companies
pay them to write stories using the company's data as a more highbrow form of
content marketing. I assume Earnest commissioned this vs them selling or
giving away the data to Priceonomics.

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lifeisstillgood
The thing that leaps out at me is that People spend $134 when ordering online
and $155 in-store. That simple stat shouts a huge amount about the changes
coming. That's 15% revenue, and I expect it is almost entirely impulse
purchases, much of which will be high fat high sugar content.

But losing 15% revenue is huge.

I also would ask where the joined up services are - I mean imagine we all
shared some domestic services for our houses in a street.

Maid service, (vaguely) communal eating (certainly communal food prep), the
same plumber and boiler services, the same x y z

I think that handing over that part of my life for someone else to think about
is attractive. And it is not really on radar.

I just wonder if it is possible

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technological
Seeing various fast foods in America and what generally people eat , it looks
like easy to cook especially the prep work is less. Still I am surprised to
see why many ppl don't cook . It's so much fun, more than you get to eat
healthy and save lots of money .

~~~
yodsanklai
> Still I am surprised to see why many ppl don't cook

Many people don't know how to cook and I assume that a lot lack basic
knowledge about what food is healthy too. I wonder why this isn't taught at
school.

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0xB31B1B
The data here seems highly suspect, every other analysis I've seen puts Uber
eats at a much larger market share than 0.1% of the market.

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larzang
I'm very skeptical of their data considering it doesn't include Peapod, the
oldest and largest internet grocery delivery company.

~~~
blatherard
If you take a look at the original blog post upon which this article is based,
they list exactly which companies they include in each category:

[https://www.earnest.com/blog/food-economy-spending-
data/](https://www.earnest.com/blog/food-economy-spending-data/)

"Brick-and-mortar includes Publix, Whole Foods, Kroger, Safeway, Trader Joe’s,
Costco, and Albertsons. Grocery delivery includes Instacart, Fresh Direct,
Foodkick, Amazon Fresh, and Thrive. Meal Kit services include Blue Apron,
Hello Fresh, and Purple Carrot. Prepped meals include Freshly, Thistle, and
Munchery. Restaurant delivery services include Ubereats, Doordash, Seamless,
GrubHub, and Caviar."

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foobarbazetc
Why isn't Postmates on the graph with DoorDash etc?

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godzillabrennus
tl;dr = consumers

