UK's Deliveroo says quits Hong Kong market
Food delivery firm Deliveroo said Monday that it would end operations in Hong Kong next month after striking a deal with local competitor foodpanda.
The Chinese city has seen growing competition in the food-delivery services market following the 2023 entry of KeeTa, an app by Chinese e-commerce giant Meituan, which surpassed Deliveroo in order volume within a year.
The British company said Monday it had "nominated liquidators to manage closure of the Hong Kong business and the remainder of its assets in the most efficient way possible", with the platform remaining live until April 7.
The firm said its "commitment to disciplined capital allocation", along with "several dynamics specific to the Hong Kong market", led the board to determine that it would not serve shareholders' interests to keep doing business in the city.
Deliveroo will close its operations by selling some assets to Singaporean firm foodpanda and by closing other assets, the company said in a statement.
"We have been proud to serve so many people such amazing food over the past nine years," Deliveroo chief operating officer Eric French said.
Delivery Hero, the Berlin-based parent of foodpanda, confirmed that it closed an agreement to acquire "selected assets" from Deliveroo.
"Deliveroo customers and couriers in Hong Kong will be redirected, and certain vendors will be onboarded to the foodpanda platform," the firm said.
- Hong Kong 'was a laggard' -
Customers of foodpanda will be able to pick from a broader range of restaurants and grocery businesses, and vendors will benefit from access to a larger customer base, Delivery Hero said.
Founded in London, Deliveroo entered the Hong Kong market in 2015 as part of its first wave of international expansion a year after foodpanda landed in the city.
Deliveroo said in its 2024 interim results that Hong Kong "was a laggard amongst our major markets", citing "a more difficult market and competitive environment".
The company said Monday that Hong Kong represented five percent of the group's gross transaction value in 2024, and had a five percentage point negative impact on international gross transaction value growth.
In contrast, Delivery Hero said in a trading update last month that it saw "strong customer growth" in Hong Kong in December.
In 2021, Uber Eats ended its five-year run in Hong Kong after years of struggling to gain market share.
Hong Kong's online food delivery market is projected to reach $4.4 billion in revenue this year and $5.8 billion by 2029, according to data platform Statista.
The sector has faced a steady stream of labour disputes, and the three major platforms were accused of inadequate labour protections by striking workers in March 2024.
"What the delivery workers have experienced is dropping wages faster than ever" after KeeTa established market dominance, the Riders' Rights Concern Group said in December.
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