NEW DELHI, NNA - Japan's SoftBank Group Corp.-backed ride-hailing firm in India is foraying into the food delivery business by acquiring online food delivery service Foodpanda's local business from Germany-based Delivery Hero AG in exchange for its shares.
ANI Technologies Pvt. Ltd., the provider of the leading ride-hailing app Ola, also plans to invest $200 million in Foodpanda India to expand the business while building an online food delivery ecosystem in the country in partnership with Delivery Hero, a global leader in online food delivery, the companies said.
The investment in Foodpanda India "will help the business be focused on growth by creating value for customers and partners," Bhavish Aggarwal, co-founder and CEO of the Ola operator, said in a recent statement.
The Japanese telecom giant holds a "significant stake" in ANI Technologies, according to a source familiar with the matter.
Niklas Oestberg, co-founder and CEO of Delivery Hero, said, "The partnership with Ola will allow us to further consolidate markets where it strategically makes sense to collaborate with leading local players." The investment commitment in Foodpanda India is "a clear and confident signal to the Indian market," he added.
The collaboration comes after Uber Technologies Inc. of the United States announced in May the launch of its food delivery service, UberEATS, in the South Asian country.
According to Anil Kumar, CEO of RedSeer Management Consulting Pvt. Ltd., which tracks India's e-commerce market, the app-based ride-hailing firms entering into food delivery business have certain key advantages in terms of knowledge of local routes and supply chain management, which are important factors in an inherently local business.
The online food delivery market in India jumped 2.5-fold to reach $300 million in gross merchandise value in 2016 over the previous year, according to the consulting firm. "UberEATS is getting more than 10,000 food delivery orders per day and expanding its services in many Indian cities," Kumar told NNA. (NNA/Kyodo)