Specialist
Former VP at SkipTheDishes Restaurant Services Inc
Agenda
- Options for SkipTheDishes in Takeaway.com merger context
- SkipTheDishes and Foodora synergies and delivery cost trends
- Evolution of take rate, basket value and order frequency
- Evolution of customer acquisition costs (CAC) and promotional landscape
- Just Eat's (LON: JE) SkipTheDishes' competitive positioning vs Uber Eats
Questions
1.
What would you identify as the most important developments within the Canadian food delivery market?
2.
What do you think Just Eat and Takeaway.com’s proposed merger means for SkipTheDishes in Canada, especially given it doesn’t appear necessarily aligned with Takeaway.com’s business? Do you anticipate consolidation in the Canadian market?
3.
How would you assess the combined market share of SkipTheDishes and Foodora in Canada? Is it correct that Foodora Canada is Takeaway.com?
4.
How would you break down the regional distribution of GMV for the online takeaway or food delivery market in Canada? You mentioned the importance of SkipTheDishes’ presence in western and central Canada. Where are customers actually spending money on online food delivery in Canada?
5.
If a potential merged Foodora and SkipTheDishes would represent 60-70% of the market, how much does SkipTheDishes contribute on a standalone basis and how do you expect that to evolve over time?
6.
What share of online delivery have in Canada vs walk-in or telephone? To what extent does that structural shift represent the most meaningful tailwind for the business as more and more people move away from ordering takeaway from the menu in the drawer and use one of these apps?
7.
Where do you think that level of 10% restaurant GMV share delivered by online partners could increase to in the mid-to-long term
8.
Do you think there is potential for average basket size to increase in Canada?
9.
An average basket size of GBP 22 multiplied by the 23 million H1 2019 orders in Canada gives a GMV of around GBP 0.5m. Would that be a sensible run rate for understanding GMV for a business such as SkipTheDishes? Is it GBP 1bn per annum?
10.
How would you say the overall GMV picture at SkipTheDishes splits between the traditional legacy marketplace orders – whereby a classic pizza restaurant or Chinese would deliver and Skip is merely connecting customer and restaurant – vs the orders that Skip delivers or fulfils on behalf of the restaurant?
11.
How do you think about the relative profitability? On a standalone basis, it appears that the Canadian business is not hugely profitable, only 0.7% margin as of H1 this year. If delivery orders are presumably lossmaking, what is required on the delivery side before it becomes a profitable proposition?
12.
In Canada, if average basket were around CAD 40, and delivery charges represent around 50% of GMV, would the company charge CAD 10 on average to the restaurant and a further fee paid to the rider that comes straight out of the customer delivery charge?
13.
Is it sustainable to charge that delivery fee to the customer?
14.
Is the commission paid by restaurants over time a sustainable proposition or do you expect platforms to compete for inventory on the basis of offering lower commissions? Excluding investment in onboarding additional inventory and marketing, the core business appears quite profitable. To what extent will competition manifest as restaurant inventory, and would that not entail a compression in margin on restaurant deliveries?
15.
What growth would you expect from the Skip business? Orders are growing by around 80% YoY, and revenue is growing at a similar clip, up 90% YoY. What longer-term growth rate would you ascribe to this business?
16.
How do you think QSRs and large franchisee groups perceive the food delivery aggregators and perhaps the opportunity they present?
17.
What is the typical split between mobile and desktop and search? Presumably customers are going straight into the SkipTheDishes app at this point.
18.
Would it be fair to assume the largest QSRs – McDonald’s, Tim Hortons, Starbucks – don’t pay 20-25%, they paying a lot less than that?
19.
Do you think these large QSRs drive market share gains as a percentage of total GMV and are perhaps crowding out the local hero restaurants that pay a higher commission and would be perhaps more profitable?
20.
What proportion of H1 2019’s 23 million orders in Canada would you reasonably expect to be driven by large branded-chain QSRs? At maturity, if thousands of QSR restaurants are brought online in a single agreement, where does that go to?
21.
How concerned would you be by developments in California and the rulings around gig workers? Do you think this has implications for the Skip model?
22.
How many drops would you expect a rider to book or make in an hour?
23.
What frequency of ordering do you expect on the customer side?
24.
How do you think about the cost of acquiring new customers for Skip? Do you think it will become more aggressive? Anecdotally, in the UK and some European markets, wallet cash is offered to customers such as GBP 10 if they order before a certain date, as a means of securing next couple of orders. Is that same promotional dynamic happening in Canada, and if so, how do you imagine it will affect Skip?
25.
How likely would you expect it to be that 10-15% commission charged to restaurants will become the norm rather than the 20-25% that is commonplace currently?
26.
Given that the food delivery marketplace is an inherently local market, what market share do you think these core restaurants in any given location typically drive?
27.
At what rate are these white label companies capturing or onboarding inventory? Would a restaurant be happy to have access to all platforms to get all possible traffic? At least on the aggregator side, there is almost no cost to have them there, it is a cost when they are bringing in customers.
28.
Do you have any concluding thoughts or observations to leave with the audience today?
