Businessmodel of Delivery Hero

Customer Segments

Delivery Hero has two major customer segments: general consumer and restaurants. The Company provides a marketplace that allows users to browse and order food from their computer or smartphone, targeting consumers that do not have the time or capacity to cook for themselves or visit restaurants in person. Delivery Hero is active across 33 markets in Europe, Asia Pacific, the Middle East and the Americas, with its core markets being in the UK and Germany. Delivery Hero’s marketplace offers products from more than 300,000 participating restaurants worldwide, primarily comprising small and medium-sized local businesses that wish to extend their brand reach and expand their customer base.

Value Propositions

Delivery Hero provides value to its customers through its convenient and easy-to-use marketplace, through which consumers can order food and make payments online. The platform is accessible via mobile and desktop browsers and various mobile apps, allowing users to place orders at their convenience, from their home or on the go, at prices the same or similar to if they had ordered in person.

Consumers are able to browse and place orders from a variety of local restaurants organised within a simple-to-use interface and receive a range of offers and discounts. Delivery Hero’s platform enables participating restaurants to extend their brand reach, secure new customers and increase sales.

Channels

Delivery Hero’s services can be accessed through its mobile and desktop websites at www.deliveryhero.com, where users can browse menus, manage accounts and place orders. The Company also has iOS and Android apps available to its users, which have the same functionality as the Delivery Hero website.

Delivery Hero operates through various subsidiary companies in its 33 markets, operating as Hungry House in the UK, Lieferheld in Germany, Pizza Portal in Poland and Foodik in Russia. These operating brands all operate their own websites and mobile apps.

Customer Relationships

For consumers, Delivery Hero’s platform is entirely self-service. Users can browse menus from their computer or mobile device, before placing an order and completing payment with no interaction with representatives from Delivery Hero or from the selected restaurant. While users can create an account through the Company’s website or via one of its mobile apps, orders can be placed without registration. After an order is placed, users can contact customer support staff over the phone or via an online chat service.

Restaurants can sign up to be part of the Delivery Hero network through an online form or through direct contact with the Delivery Hero team. The Company operates a number of social media accounts through its various brands and subsidiary companies, including on Facebook, Twitter, Instagram and YouTube. It also keeps registered customers updated with deals and discounts via email.

Key Activities

Delivery Hero operates a network of online food ordering and delivery platforms across 33 markets in Europe, Asia Pacific, the Americas and the Middle East. The Company’s platforms, accessible via mobile and desktop browsers and mobile apps, allow consumers to browse menus from a range of local restaurants, place orders and make payments.

Delivery Hero charges participating restaurants a subscription fee in order to be part of its network and takes a commission on every order placed through its marketplace. The Company also manages a network of affiliate marketing partners, to which it pays commissions on sales.

Key Partners

Delivery Hero partners with a variety of different companies across its 33 operating markets. It collaborates with tech companies, delivery service providers and marketing affiliates. Delivery Hero operates and manages affiliate marketing networks through which online publishers, websites and businesses can receive commissions when their referrals lead to a sale.

These affiliate networks are operated via local subsidiaries, with the Company’s UK affiliate program managed by Hungry House. Delivery Hero has previously partnered with a number of local delivery service providers, often leading to a merger or an acquisition of the Company.

Following an investment by Germany’s Rocket Internet, Delivery Hero has partnered with Foodpanda, a similar company owned by the investor. Additionally, Delivery Hero has partnered with data analytics companies, such as Localytics, to obtain insights into customer habits.

Key Resources

Delivery Hero’s key resources are its software platform, its IT infrastructure and its personnel. The Company’s business model also depends largely on its network of participating restaurants, and benefits from the Company’s network of affiliate marketing partners.

Cost Structure

Delivery Hero primarily incurs costs relating the maintenance of its software platform and IT infrastructure, the retention of its personnel and the management of its partner and restaurant networks. The Company has a workforce of around 3,000 employees, to whom its pays salaries and benefits, and operates a network of offices that accrue fixed costs relating to rent and utilities.

Revenue Streams

Delivery Hero generates revenue through fees levied on its participating restaurants. The Company charges an initial a set-up fee and a monthly subscription fee for restaurants to have delivery orders placed through its marketplace, and takes a commission on every order completed. In the UK, one of Delivery Hero’s core markets, these fees amount to a reported £499 set-up fee, a monthly £14.90 subscription fee and 14% commission on all orders.

It is not clear how these fees vary across the Company’s various operating jurisdictions. Delivery Hero does not disclose its revenue figures to the public. Estimates, however, suggest that the Company generates around $600 million in annual revenue.