Foodpanda selling off Indonesian arm, but plans to stay in Southeast Asia

Photo credit: George Lu.

According to TechCrunch:

Multiple sources close to the company told TechCrunch that its business in Indonesia, the world’s fourth most populous country, is available to potential acquirers for less than US$1 million — and an all-cash deal isn’t even a requirement. Foodpanda, which is active in 500 cities across five continents worldwide, has slashed the asking price for its Indonesia operations to basically zero after more than a year of unsuccessfully trying to offload it, one source added.

TechCrunch understands from a source that the company is reevaluating its entire business across [Southeast Asia], and it has already made tentative efforts to sell in some countries. The company expanded in Asia via a series of acquisitions, which, in many cases, ironically leaves it without obvious suitors.

Responding to TechCrunch’s article, a Foodpanda spokesperson tells Tech in Asia that they are not looking to exit Southeast Asia, where it claims market leadership in the space.

“We recently turned two of our regions profitable, being Central Eastern Europe (including Russia) and the Middle East. Adding to this, Foodpanda possesses a very strong cash position (US$101 million as of 31 March 2016) and is debt-free and therefore in a strong position to keep on supporting our Southeast Asian businesses.”

He adds that Southeast Asia is Foodpanda’s fastest growing region, and as such multiple parties have expressed interest to partner or invest in the business. They are still evaluating the offers.

Nonetheless, if Foodpanda’s fire sale in Indonesia is true, it may be an indication of Rocket Internet’s rocky ride in Southeast Asia. An early proponent of ecommerce in the region, Rocket invested hundreds of millions in a bid to dominate the space early.

However, it became apparent this year that the time has run out for some of Rocket Internet’s businesses, as customer lifetime values have not crept up enough to offset the costs of doing ecommerce in the region.

It seems the baton is being passed, albeit unwillingly, to ecommerce giants Amazon and Alibaba, who look set to enter the region in a big way.

Update on 20 August: Added statement from Foodpanda.