Photo credit: Delivery Hero
Delivery Hero’s growth is hindered by its operations in Asia, CEO Niklas Östberg told Bloomberg.
Although Asia is the company’s most profitable segment, it has contributed to a slowdown in overall growth.
Delivery Hero’s Asia business thrived in Asia when strict Covid-19 restrictions were in place, but this growth tapered off as lockdowns were relaxed. In the third quarter of 2023, the company’s gross merchandise value (GMV) in the region was down 6.2% year on year to US$6.8 billion.
However, the company appears to remain committed to the region, with Östberg saying the slowdown is only part of a “temporary plateauing before hopefully kicking off again.”
The company’s overall GMV hit US$12.5 billion in Q3, surpassing analysts’ average estimate of US$12.3 billion. Delivery Hero has updated its outlook since, hoping for its GMV growth to approach 7% in constant currency.
In September, Delivery Hero was mulling selling part of its Southeast Asian operations, including the Foodpanda brand. Grab is reportedly one of Foodpanda’s prospective buyers in a potential US$1.1 billion deal, according to Wirtschaftswoche, which first reported the news.
See also: Can Grab’s dine-in services reverse a fall in food delivery growth?
Editing by Miguel Cordon and Dhania Putri Sarahtika
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