Andrew Hui, general manager of Deliveroo Hong Kong. (PHOTO PROVIDED TO CHINA DAILY)
Online-delivery company Deliveroo is eager to continue investing and growing in Hong Kong by expanding its services in food and groceries, including the expansion of its Editions network to cover more districts, the company’s general manager said.
Deliveroo, a technology company at its heart, was founded in 2013 by William Shu and Greg Orlowski
There is untapped potential for food-delivery services in Hong Kong, as such services continue to explode amid a constantly changing macroeconomic environment, he added.
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The general manager, Andrew Hui Chee-yin, said the company is committed to growing and expanding in Hong Kong, and the network has increased from 8,000 Hong Kong restaurants in 2020 to more than 10,000 restaurant partners now.
Deliveroo, a technology company at its heart, was founded in 2013 by William Shu and Greg Orlowski. Technologies such as deep learning play an important role at Deliveroo, which listed on the London Stock Exchange on April 7, 2021. The share price performance has been poor since then, falling from a high of nearly 400 pounds ($500) to about 90 pounds now. Shu, who was the first Deliveroo rider, is the largest individual shareholder.
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“Deliveroo entered Hong Kong’s market in 2015 and has quickly become an industry leader. We have a hyperlocal strategy for each district, targeting specific consumers’ needs within the district. We cover most districts,” Hui said.
“Looking from the most ordered restaurants by Hong Kong residents , we can see local food lovers enjoy various cuisines.
“Our consumer survey reveals that 75 percent of Hong Kong residents see themselves using food-delivery services more regularly in the future than they do now, and this is a promising indicator of the untapped potential in the food-delivery market,” Hu said.
When it comes to food preferences, although Deliveroo trends indicate that nearly 53 percent of consumers in Hong Kong have moments of food cravings, a growing number of customers do not want to eat restaurant food for every meal, Hui said.
“With more free time as a result of remote working possibilities, many residents have expressed an interest in cooking for themselves. So we have extended our offerings to include a broader range of categories, such as supermarkets, convenience stores, and delis. Globally, the total number of our grocery partner sites has grown to over 11,000 in the fourth quarter 2021, as compared with around 7,000 in the fourth quarter of 2020,” he said.
To make it easier to order everyday grocery essentials from the safety and comfort of one’s home, Deliveroo launched its first on-demand grocery-delivery service in October 2020.
The company is partnering with ParknShop, Don Don Donki, Marks & Spencer, City’Super and many others, Hui said. “Take ParknShop as an example. We cooperated with them in 50 branches in June 2021, and now the number has increased to close to 200,” Hui said.
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Hui said the company’s mission is to be the definitive online food company, “the platform that people turn to when they are hungry or thinking about food. The key to achieving this is being available when and where consumers want to order. Our ultimate goal is to capture as many of the 21 meal occasions as possible,” Hui said, referring to breakfast, lunch, and dinner, seven days a week.
The Editions-branded kitchens are an essential part of Deliveroo’s offer to restaurants, Hui said. These provide a lower risk expansion opportunity for restaurants opening new sites, and they do not need to worry about huge fixed costs such as equipment and rent.
“Following the impact of COVID-19 with new consumer habits and routines forming, we have seen an explosion of interest in the Editions operating model. We had an aggressive investment plan last year for Editions, which helped to support our partners and create much-needed local job opportunities,” Hui said.
“Since pioneering the creation of delivery-only kitchens in 2017, Deliveroo has grown to nearly 300 Editions kitchens worldwide with eight in Hong Kong,” he added.
“To better support our restaurant partners, during the pandemic we have activated the ‘Here to Deliver’ campaign to help restaurants reach their target customers through multichannel mass-marketing plans. Moreover, we have invested over HK$10 million ($1.3 million) in funding to help restaurant partners who were forced to shut down temporarily due to the COVID-19 fifth wave, improving their brand awareness, and increasing sales through promotional offers.’’
The company had a solid final quarter and strong operating performance for the whole of 2021, including a good performance in the international segment amid the pandemic challenges.
“In Hong Kong, we do not have any specific figures to share about the overall performance. However, I can share that we have substantial growth in the number of riders and restaurant partners, which increased from 7,000 and 8,000 to over 10,000 in December 2021,” Hui said.
“Also, 78 percent of consumers in Hong Kong reported that they ordered from food-delivery services at least once a week since the beginning of the COVID-19 pandemic, and they spent an average of HK$1,324 a month. That is a 21 percent increase as compared with 2019.”
The company’s 2021 gross transaction value was up 70 percent year-on-year. The biggest component of revenue is commissions from restaurant and grocery partners.
In a trading update on April 12, Deliveroo reported solid first-quarter growth. It came in line with the March guidance. GTV grew by 12 percent year-on-year in constant currency, while orders increased 18 percent. International GTV was up by 11 percent to 831 million pounds, and the number of orders climbed by 16 percent year-on-year to 41.7 million.