Just Eat Takeaway Grubhub CEO Jitse Groen said at the end of the Q4 2021 call about the partnership that 'there might be some super large consumer brands interested', I think the meaning of these words is clear. I have written a lot about Just Eat Takeaway but the potential consequences can be detrimental to DoorDash. More recently, there has also been speculation about a potential Grubhub sale. Short-term what worries me the most for DoorDash's prospects is the fact that Just Eat Takeaway ( OTC:TKAYF) is practically putting Grubhub for sale through a 'partnership', whatever a partnership may entail. It's clear that the competition in the same-day delivery market is strong and increasing, it is only logical for those platforms to enter food delivery to provide a competitive offering to customers. The interesting fact is that the logistics of the same-delivery market and the food delivery market overlap. My point is clear, there is a lot of competition. As elaborated in my article about Amazon, Amazon's supposed entrance into the same-day (grocery) delivery market is a huge long-term risk for same-day delivery companies like DoorDash. Instacart is a same-day grocery delivery platform but as DoorDash enters this market, it is only fair to consider Instacart as competition.Īlso not irrelevant, Amazon has a 40% market share in e-commerce and its vision is to be the place online to buy everything. With an expected GOV of $40 billion for DoorDash by 2021, competitors like Instacart ( ICART) are nearly as big (estimated at $30 billion). I note Walmart is also a relatively known grocery chain with a 26% market share in grocery - that mainly focuses on the suburbs.ĭoorDash also does not dominate the same-day delivery market. DoorDash may dominate food delivery in the suburbs of the US and California but the suburbs is also the area with the most quick-service restaurants. Reality: Uber Eats and Grubhub are strong competitors in most big cities outside California. My point: the US is very diverse and DoorDash's dominance in some areas doesn't guarantee dominance in others. Another example, according to Yipitdata, Uber Eats has the most gross merchandise value in Florida and New York. Cool that DoorDash has the best offering in California, but that's further away than Bermuda - 4 times as far away actually. As food delivery is a business with local network effects, people living in Manhattan will probably download the Grubhub app since it has the biggest selection of restaurants in the area. Take Manhattan: in Manhattan, DoorDash operates a market share of 15%, which doesn't sound like a profitable share to me. The competitionĬontrary to popular belief, DoorDash has not won food delivery in the entire US. As DoorDash starts to compete with Amazon and Walmart, an entrance by those two in food delivery is not out of the question. And it is far but certain that DoorDash will become the leader of the last-mile delivery market. As DoorDash has entered the business to deliver practically everything from merchants to your home in let's say 1 hour, the competitive landscape also changes. Still, this graph does not show the underlying market shares per region which differ vastly.Īlso, this doesn't reflect the reality that DoorDash's biggest competitors are not Uber ( UBER) and Grubhub (GRUB) but Walmart ( WMT) and Amazon ( AMZN). This is the graph that showcases beautifully how DoorDash in a relatively short time has amassed a leading position in the food delivery industry. But as it enters this market, DoorDash starts to compete with the big winners of the last decades. Generally known as the last-mile delivery market. Since that statement, DoorDash's stock has started to plummet at a pace that I personally even would have never expected.ĭoorDash is not just a food delivery platform, it is a platform to deliver everything, particularly food, groceries, and other necessities. 'I think this acquisition may indicate that the risk/reward of DoorDash's stock is less favourable than previously, and so management thinks it is a good time to diversify the business.' In my last article about DoorDash ( NYSE: DASH) and its Wolt acquisition, I warned that this acquisition may be a red flag:
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