Specialist
Former Global Head at Delivery Hero SE
Agenda
- Just Eat acquisition and potential deal synergies
- Integration of Delivery Hero’s German asset
- Marketplace to delivery transition and gross margin impact
- Average basket trends and order frequency
- Customer and rider acquisition cost trends
Questions
1.
What do you think the confirmation of the Takeaway.com and Just Eat merger means for the rest of the market? How will Delivery Hero, Uber Eats and Deliveroo digest the news?
2.
What is the overriding rationale for the merger of Takeaway and Just Eat? As you mentioned, you’re not taking a tremendous amount of cost out of the business. You don’t generate additional top-line synergies, or not so much to speak of. Is this just a defensive play?
3.
Which of the non-core markets do you think are potential spin-off candidates? Australia, for example, is tremendously competitive. Could Canada be one of those that Just Eat could turn around with additional investment?
4.
What had led to Takeaway’s relative success in expanding into new markets? One of the commentaries around this merger is that it will be able to translate some of that discipline of selecting new markets and cementing its place in new markets, so what has it done differently?
5.
In terms of this deal potentially triggering another round of consolidation in the market, are there other assets that Delivery Hero or some of the larger players such as Uber or Deliveroo, backed by Amazon, are likely to compete for? It appears there’s not a tremendous amount on the table.
6.
Would you consider Delivery Hero acquiring Deliveroo out of the question? I believe the last fund raising valued Deliveroo (ph 34.31) at just over USD 2bn, in late 2017. I’m not aware of an updated valuation, following Amazon’s participation in that deal.
7.
Germany has now become Takeaway’s largest market, not necessarily from an earnings perspective, but certainly from a gross merchandise value perspective. How would that market grow?
8.
What portion of Takeaway orders are digital and made online? What’s the current penetration in the German marketplace? Is it 15-20% online for example?
9.
I’ve observed estimates around a gross merchandise value increasing towards EUR 2bn-2.6bn in 2020 for Germany, post-Delivery Hero acquisition. Do you think that’s a realistic estimate?
10.
How has average basket size trended over time in Europe? Does that typically trend down as order frequency rises? One would assume that’s a natural relationship.
11.
How does frequency trend with customer maturity? The more familiar with the platform the customer is, the more frequently they order. How quickly does it take for an onboarded customer to hit that mature run rate of order frequency?
12.
Takeaway’s Scuber project, for example, is a perennial problem that most of these marketplaces and businesses have wrestled with over time. How do you make that whole business sustainably profitable, given the cost to deliver scales in line with your revenue on delivery?
13.
Takeaway.com or Just Eat typically enjoys very good market share and share of mind in secondary and tertiary towns in the UK, Germany, the Netherlands, or wherever that may be. Clearly, there’s no incentive for that business to roll out delivery in those markets because, as you say, that would have a direct cannibalisation impact. What happens if a competitor moves in with a delivery offering?
14.
How might you expect delivery to have an impact on the marketplace orders, as it gives the consumer more options and choice for home delivery? Has the good market share that Just Eat has always enjoyed in those secondary and tertiary towns been because there have been no other options for home delivery of food? If some restaurants’ inventory were delivery-enabled, would that just have a structural impact on market share by offering the consumer more choice?
15.
What happens if a Deliveroo comes in and starts to get some volume, some density in Deliveroo? What’s to stop those kinds of businesses bringing on the classic marketplace inventory onto their own platform and fulfilling that as a marketplace order, but integrating it with the overall inventory on the app? Anecdotally, that’s something that Deliveroo is trying in London, having it fulfilled by the restaurant.
16.
Can you address the cost or the amount that the rider is being paid? If said rider delivers five drops in an hour and he’s paid EUR 2 per drop, it’s EUR 10. If he doubles that, he gets paid double the amount to deliver. There doesn’t appear to be a very strong scale benefit, at least on the cost-of-delivery side.
17.
Considering the growing role that QSRs such as Burger King of McDonald’s have to drive volume through the delivery companies, less so the marketplaces, do you think that overall percent challenges?
18.
Do you have any concluding thoughts to leave with the audience?
