DOORDASH LAUNCHES IN JAPAN AMID GROWTH OF ONLINE FOOD DELIVERY SERVICES

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DoorDash, the American food delivery service, has launched in Japan, which is now the fourth market in which the company operates.

The firm recently launched its restaurant delivery operations in the city of Sendai, with expansion to other parts of the country likely later on.

It comes as online food delivery services have enjoyed rapid growth in multiple countries as a result of the coronavirus pandemic.

Japan is seen as a particularly important market for companies such as DoorDash given the country’s high density of restaurants.

In a statement, DoorDash’s CEO and Co-Founder, Tony Xu, said the company was “thrilled” to begin operations in Japan.

“Our strategy has always been to empower local economies, especially in the suburban markets that are historically underserved yet the appetite for connectivity between merchants and customers is high,” he added.

“We look forward to helping power the Sendai economy by helping merchants to grow, connecting consumers to those merchants, and creating jobs and flexible earnings opportunities for Dashers.”

Hundreds of local restaurants as well as national outlets have signed up, with customers being able to order from them using DoorDash’s app. Among the restaurants included are Japanese chains and international providers including KFC and Pizza Hut.

The company said its new Japanese operations have been well received by both restaurants and local workers.
“The enthusiasm for DoorDash has been overwhelming, with Dashers and merchants signing up for our launch. We are looking forward to supporting the growing Sendai economy,” Ryoma Yamamoto, the DoorDash Japan Country Manager, said in a statement.

As well as being able to sell through DoorDash’s marketplace app, vendors will also be able to use the company’s Storefront online ordering system. Through this, orders can be placed directly with the restaurant.

According to a note from Kearney, the analysis company, online food deliveries in Asia grew 30% last year, a significant increase on 2019’s growth of 20%, with the pandemic credited with the rapid expansion.

This growth has been seen despite the food service market as a whole shrinking on the continent by up to 30% in the same year, according to Kearney.

The company said that aggregators, including the likes of DoorDash, would “start to dominate the food service ecosystem” on the continent and would start to build their own networks of multi-brand cloud kitchens, which cater solely to online orders.

“Customer-facing digitalisation will become an industry norm,” the company said. “Established chains will build and strengthen their own customer-facing apps, while smaller brands will continue to depend on aggregators.”

DoorDash is following in the footsteps of its arch-rival UberEats, which has been present in Japan for five years, doing battle with a host of local operators such as Kurumesi.

DoorDash, which was founded in 2013 and is headquartered in San Francisco, is at a much earlier stage of international expansion compared to UberEats. While UberEats has operations in more than two dozen nations, DoorDash is active only in the United States, Australia and Canada, and now, Japan.

Despite expanding its operations internationally, according to luxury-lifestyle magazine Robb Report, the company is losing significant amounts of money. Robb Report said that the company’s 2020 turnover was $2.9 billion (€2.38 billion), and its losses for the year as a whole were $461 million (€378.6 million).

In the final quarter turnover was $970 million (€796.5 million), which is more than double the figure for the same three-month period of 2019, but losses in that quarter alone were $312 million (€256.2 million).

Xu is the highest-paid chief executive in the Silicon Valley area of California, according to reports in US media, with a pay packet of no less than $413 million (€339.2 million) last year.

His pay is around double that of the second-placed CEO, Amir Dan Rubin of One Medical, reports quoting the San Francisco Business Times said.

Xu’s compensation is the seventh-largest of any chief executive in the United States for the past 14 years, reports said, although much is in the form of shares.

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