Foodpanda Bangladesh sees losses surpass Tk1,000cr by 2023-end
Before and throughout the pandemic, Foodpanda experienced rapid growth in daily orders, fuelled by intensified marketing efforts and discounts aimed at expanding its market presence
Foodpanda businesses in Bangladesh accumulated losses exceeding Tk1,000 crore by the close of 2023, according to the latest financial statement from its German-based parent company.
Delivery Hero, the parent company of Foodpanda, an app-based food delivery platform, and Pandamart, its on-demand grocery delivery platform, revealed that the cumulative loss of its three Bangladeshi entities amounted to €86.22 million, equivalent to around Tk1,013 crore, at the end of 2023.
Out of the aggregate sum, Foodpanda Bangladesh Ltd, which has been incurring losses since 2016, accounted for the largest portion, accumulating over €69.5 million.
Following closely, Delivery Hero Stores (Bangladesh) Ltd, the operator of Pandamart, accrued over €15 million in losses over four years. Meanwhile, DH Kitchens (Bangladesh) Ltd, the cloud kitchen operator, incurred a total net loss of €1.54 million during the same four-year period.
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In reflection of the parent company's announced plan to prefer profitability over expensive growth after the Ukraine war, all three companies managed to reduce their losses last year. However, none managed to post a net profit.
Foodpanda Bangladesh declined to provide comments in response to a request from TBS on Thursday.
Following substantial downsizing measures such as reducing office space and staff, the food delivery company succeeded in lowering its annual net loss to €10.13 million in 2023, down from its previous record net loss of €18.29 million in 2022.
Foodpanda, initially established under the internet incubator firm Rocket Internet, introduced app-based food delivery services to Bangladesh in 2013. In 2016, Foodpanda, along with all its affiliated companies worldwide, was acquired by Delivery Hero.
Before and throughout the pandemic, Foodpanda experienced rapid growth in daily orders, fuelled by intensified marketing efforts and discounts aimed at expanding its market presence. Amidst the pandemic, Foodpanda's daily delivery volume surged, with the company even fulfilling over 1.3 lakh orders per day, while simultaneously extending its services to all 64 districts of Bangladesh.
However, the inflation resulting from the Russia-Ukraine war has led to a deceleration in the food delivery market, with consumers tightening their budgets and companies adopting a more conservative approach to subsidised business expansion.
Other food delivery platforms like Uber Eats, Alibaba Group's Hungry Naki, and locally established Shohoz Food have exited the market due to intense competition and unfavourable profit margins.
Only Pathao has remained in the market to compete with Foodpanda.
According to industry insiders, nearly 100,000 online food orders are currently being fulfilled, with Foodpanda maintaining its position as the market leader in Bangladesh. Additionally, over the past four years, Foodpanda has extended its on-demand grocery delivery platform, Pandamart, to the capital.
