Why Foodpanda and OpenRice are losing their appetite for Indonesia

Photo Credit: Pxpod.

News that food delivery startup Foodpanda plans to sell off its Indonesian branch was just making its round when Daily Social reported that restaurant discovery site OpenRice downscaled its operations in Indonesia.

The Hong Kong-headquartered company is rumored to have shut its office in Jakarta some months ago, while some employees remain active. Tech in Asia has reached out to OpenRice Indonesia for comment, and we will update this story when we hear back.

OpenRice and Foodpanda aren’t small fish – they’re part of international groups. OpenRice belongs to a group of media sites that includes famous career portal JobsDB. And Foodpanda is owned by German startup builder Rocket Internet.

Why are they losing their appetite for Southeast Asia’s largest economy?

Go-Food joined the party

Photo credit: YouTube.

One possible explanation is that the rapid ascent of Go-Jek’s on-demand empire in Indonesia makes it more difficult for startups in the food space to grow.

Go-Jek is primarily for ride-hailing, but its other pillar is food delivery. Not only that – the app also serves as a restaurant discovery tool. It shows you restaurants nearby – sorted by tastes and opening hours.

In a recent release, Go-jek claimed to be the second-largest food ordering app in the world, after Ele.me in China. It said it has fulfilled a total of 15 million orders to date, with 35,000 partner restaurants.

Go-Food (Go-Jek’s food arm) might be eating into the market shares of both Foodpanda and OpenRice.

With a fresh US$550 million in the war chest, Go-Jek is gaining momentum.

Small basket market

Steven Kim, co-founder of restaurant discovery site Qraved, has another explanation. Before starting up on his own, Steven co-founded several Rocket Internet ventures in the region, so he has considerable insight in this market.

“The challenge for them [Foodpanda] was that they never managed to get user discovery into their platform,” Steven says. “Nor did the quality of service go up with [the] assistance of tech.”

Long game