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Delivery Hero withdraws from German cities

Status: 12/22/2021 12:45 p.m.

The online provider Delivery Hero only returned to the German market in the summer. Now he is stopping his food delivery service in this country. Only one development department should remain.

The food delivery service Delivery Hero only returned to the German market in the summer after its core business had been handed over to the competition years ago. Now the company had to admit its defeat: The group surprisingly announced that it will cease business under its Foodpanda brand in the face of fierce competition from Lieferando, Wolt, Uber Eats, Flink and Gorillas in Germany.

Foodpanda Germany will end its activities in six German cities and only have one development department in Berlin, said Delivery Hero. The “development of innovative logistics and technology solutions for the delivery industry” should be promoted there.

The Japanese business is also sold

Delivery Hero also announced that it plans to sell its Japan business: “Although we have built two fantastic Foodpanda teams that are making great strides, it has become increasingly difficult to add real value to our ecosystem in these countries,” explained Company boss Niklas Östberg made the decision.

The Delivery Hero boss indirectly admitted that the German market is currently not lucrative enough and ties up too much money. The decisions to leave the German and Japanese markets were not easy, he said. But the move now allows funds to be shifted to attractive growth opportunities in other markets and businesses, it said. Where possible, Foodpanda employees should find other positions in the Delivery Hero group or with partners. The company is also planning severance packages.

Share benefits

The decision was well received on the stock market. Delivery Hero titles climbed at times by more than seven percent and currently cost around 98 euros. The share had previously fallen for weeks after trading at just under 130 euros in November. Since the announcement of the start of Germany in June, the share had lost 14 percent, while the DAX remained almost unchanged during the same period.

The delivery business in Germany has been hotly contested for a long time: The US industry leader Doordash took over Wolt for seven billion euros in the summer and again invested in Flink, while Delivery Hero got involved with Gorillas. In addition, Uber Eats increasingly delivers in Germany. Experts predict further consolidation for the coming year in the highly competitive market, which is also suffering from the shortage of drivers.

Reference-www.tagesschau.de

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