How the delivery service Liferando wants to reinvent the canteen

How the delivery service Liferando wants to reinvent the canteen

Berlin
Lieferando sets up a delivery service, like other delivery agents. But the company sees big business at the canteen dinner.

How the delivery service Liferando wants to reinvent the canteen

Delivering food by bicycle does not pay off. This last had to be sorrowful Deliveroo experienced, who withdrew from certain cities and countries. The Berlin Bringdienstvermittler Lieferando starts its own offer, with permanent employees and their own wheels. And company boss Jitse Groen has even more plans to gain market share in Germany: for example, the invention of the canteen.

The market for Bringdienstvermittler in Germany is contested. The largest suppliers are the Dutch takeaway from Groen (Lieferando) and Delivery Hero from Berlin (Lieferheld, pizza.de, Foodora). Also included is the London delivery service Deliveroo.

Number of orders should grow

The business model of the companies is basically very simple: the company combines on one side an overview of restaurants that deliver food. The customer can choose and order. The company takes over the order processing and demands a fee from the restaurant. The restaurant usually delivers itself to the customer. The driver pays cash or orders by card.

Especially in the big cities, the brokers have many customers, in the country it is much less, but overall, only a few use the services. "In the Netherlands, 27 percent of the population has ordered from us in the past twelve months, compared to seven percent in Germany," says Groen. He wants to reach 70 percent in both countries. Where Groen is not just about 70 percent of the population ordering food. "We have to make sure that customers order more frequently." Currently, they order on average eight times a year.

Race for the top position

Enough space for several providers would have to be in the German market with its estimated 6.8 billion euros potential. The growth rates are already well over 40 percent, the competition is large, the marketing spending high. Because in the long run only money, who is the number one. Groen's Takeaway is in the black, thanks to its strong position as a quasi-monopoly in the Netherlands. In Germany, the company with world market leader Delivery Hero delivers a race for the top position. "After orders we are bigger than Lieferheld and pizza.de together," says Groen. 2015 was the decisive year for him, because Lieferando had overtaken pizza.de for the first time, until then the market leader.

In the next few months, he wants to expand marketing spending to get more people to order. TV advertising, posters, Internet banners are designed to attract customers to the Lieferando site. Exact numbers to Germany does not call Groen, altogether Takeaway spent in the first half year more than 65 million euro for marketing. And Germany accounted for most of it.

Own e-wheels and own workshops

A little bit of marketing also includes the orange-colored bikes Lieferandos, which are recently in Frankfurt and Berlin on the road. Groen wants to extend the offer to other cities. There are own e-bikes, own clothing, own workshops and employment contracts for the drivers. "That must be legally all right. And only if we pay the drivers reasonable, we can stay in the business permanently, "says Groen. "But we can not earn any money there." The competition has already noticed that. In August, Deliveroo withdrew from ten of the 15 cities in Germany where the British were operating.

Groen's calculation is simple: a driver can usually deliver two orders per hour and spend a lot of time waiting in the restaurant. The average order has a value of 23 euros, the fee for the intermediary would be 25 percent 5.75 euros, makes 11.50 euros per hour revenue. The driver gets but 14 to 15 euros per hour. That means a loss. "And the administrative costs are not included."

"The customer wants that"

And why does Lieferando still build a delivery fleet? After all, the currently more than 1,000 drivers – at least half of all takeaway employees worldwide – deliver only 2.3 percent of all orders, with the rest being supplied by the restaurants themselves. "The customer wants that," Groen says succinctly. Now customers want a lot, which does not necessarily pay off.

However, Groen expects to be able to deliver food to even chains like Vapiano, Burgerking and McDonalds, who do not have their own delivery service, which is driving customers to order more, which brings Lieferando more sales. Fees for the delivery does not want to take Groen. This could make the product unattractive from the customer's point of view and would not cover the costs.

A canteen for companies without a canteen

More orders should also bring 10bis, an Israeli company that has just bought Takeaway for 135 million euros. The question: How do I bring a canteen to a company that does not have a canteen? The answer sounds so easy that you wonder why no one else has come up with it. 10bis practically organizes the canteen operation via its website, takes care of billing and also processes the food subsidies of the participating companies for their employees. They order online every day at restaurants and delivery services, which makes sense for them to have lunch.

The food is delivered fresh at lunchtime. The participating company itself does not need a canteen with kitchen staff or rigid menus of a big caterer, but only a place where the delivery services can deliver the food of the employees. The employees get great flexibility in terms of food.

Can the delivery drivers be better used?

Groen plans to roll out the Tel Aviv concept now wherever Takeaway operates. And is counting on the new tech companies in particular – as an additional incentive to work for these companies. 10bis is currently only active in Israel with its big start-up scene, and Groen already earns money.

All providers are looking for new ideas: Do we offer the restaurants their own POS systems, inventory planning and billing? Can the delivery drivers be better used, for example in addition to medication, as Delivery Hero does? Can you deliver anything other than lunch and dinner? Should cooks, who only want to cook for online customers, offer premises and handle delivery and orders?

"It's like in the industrial revolution"

At least in part, Groen has an answer to that question: "Having restaurants pay for order placement is a good business. To take orders for the restaurants is a bad business. Setting up and renting kitchens is an even worse business. "" It's like the industrial revolution, "says Groen. "You try a lot. And it's unclear where it's going. "Not all providers would survive. "Worldwide, there are four major players outside of China. They'll merge someday, "Groen says. "But there will still be a few years in the country." He recently bought the Berliners of Delivery Hero, the business in Switzerland. Currently, there are no plans to work together.

Biggest competitor is Delivery Hero

Jitse Groen founded the Dutch company in 2000 as a student. The 39-year-old Dutchman is a major shareholder and manages the company. Takeaway operates in nine European countries and Vietnam and is the market leader in Germany, Austria, the Netherlands, Belgium and Luxembourg. The German subsidiary Lieferando, headquartered in Berlin, has been on the market since 2008 and Groen bought it in 2014. The biggest competitor in Germany is Delivery Hero from Berlin. However, the world market leader is now doing most of the business in the Middle East.

Takeaway had around 12.6 million customers at the end of the first half of 2018 and served 36,400 restaurants. In the first half of 2018, the company sold EUR 110.1 million (previous year: EUR 77.4 million), of which EUR 39.2 (27) million was in Germany. The loss amounted to 14.7 million euros. The company has been listed on the stock exchange since 2016.



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