American food delivery app by dash It was launched in Japan, marking the company’s first foray into the Asian market and the latest move by a large delivery group to expand globally to take advantage of a demand boom driven by the pandemic.
DoorDash, the US market leader, said the move would give it access to one of the “most restaurant-intensive countries in the world,” although it will start out relatively small.
Emulating its strategy in the United States, where it initially focused on suburban areas outside major cities, DoorDash said it has recruited “hundreds” of restaurants in Sendai, a city north of Tokyo with a population of about one million.
“It’s a very underserved market,” said Tony Shaw, CEO, speaking to the Financial Times on Tuesday, describing Sendai as a “microcosm” of the country as a whole. “Nationally in Japan, based on what we’ve seen, the most generous estimate is that 10 percent of merchants adopt delivery. So I think it’s just very early days.”
Restaurant culture in Japan means that people tend to stop and eat on the way home, rather than ordering food for delivery, but newcomers see opportunity in the growing number of retirees and double-income families.
The move comes as major app delivery companies aggressively expand into new markets, betting habits formed during pandemic-related lockdowns will become permanent. At the height of US shutdown measures, DoorDash’s revenue jumped more than 200 percent, prompting a massive initial public offering. Raised nearly $3.4 billion for the company.
Last month , The Financial Times reported, DoorDash was preparing to launch in Germany, another controversial market that would pit the company against Just Eat Takeaway and Delivery Hero, as well as Uber Eats, which in April It plans to take off in Europe’s largest economy within ‘weeks’.
Meanwhile, through its acquisition of Grubhub, which has yet to close, Just Eat Takeaway will establish its first presence in the United States, jeopardizing DoorDash’s more than 50 percent US stake.
In Japan, DoorDash will face familiar opponents but also well-established local players.
“It’s definitely going to be very difficult,” Shaw said. “When we’re talking about an investment like Japan, we’re talking about a multi-year, plus contract type of investment.”
Uber Eats launched in the country in 2016, followed in 2020 by Delivery Hero and Chinese Didi Chuxing. Headquartered in Tokyo, Demae-can has partnered with nearly 60,000 merchants and has 5.82 million active users. It also offers a wide range of services such as mail order and dry cleaning.
DoorDash will also have to deal with a handful of powerful local businesses in neighboring markets, including grocery delivery co-operatives, Yamato and Sagawa parcel services.
While DoorDash has begun expanding into convenience store products in the United States, Xu said it would not rush to take similar steps in Japan.
“He crawls, he walks, he runs,” he said. “We definitely don’t want to make any mistakes just trying to copy and paste what we’ve seen that might work in other geographies. I think for us, we’re going to have to build a very Japanese product.”