Businessmodel of Foodpanda

Customer Segments

Foodpanda has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:

• Consumers - Individuals who want to be able to order foods from restaurants online.
• Restaurants - Restaurants that want to be able to obtain customers outside usual channels. ### Value Proposition

Foodpanda offers five primary value propositions: accessibility, convenience, customization, cost reduction, and brand/status.

The company creates accessibility by enabling restaurants to market themselves to customers who do not want to visit the physical location and might have difficulty finding their websites online.

The company offers convenience by enabling consumers to place orders from websites or through its mobile app. Orders can be made 24/7, with a pre-order option also available. Further, consumers have the option of picking up orders or having them delivered, and paying with all major credit cards or with cash. Customers can also easily obtain general impressions of the outlets through reviews.

The company offers customization by allowing customers to filter restaurant choices by type of cuisine and to filter meals by category (appetizers, main course, desserts, etc.).

The company reduces costs by offering a number of daily deals, such as free deliveries or meal discounts. This features saves customers money and enables them to try new offerings.

The company has built a strong brand because of its success. It now operates in over 500 cities in 24 countries, working with more than 38,000 restaurants. It has also won some prestigious honors. For example, in 2014 it won the European Tech Startup Award for “Best eCommerce Startup.”

Channels

Foodpanda’s main channel for consumers is its website. Its main channel for restaurants is its Sales/Business Development team. The firm promotes its service through its social media pages.

Customer Relationships

Foodpanda’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the website while having limited interaction with employees. That said, there is a personal component in the form of phone and e-mail support (and live chat support in some areas).

Key Activities

Foodpanda’s business model entails maintaining a robust common platform between two parties:  consumers and restaurants.

Key Partners

Foodpanda does not have a formal partner program. However, it sometimes forms partnerships with similar services to expand its reach. For example, in 2014 it launched a joint venture with OpenRice to increase its presence in Southeast Asia.

Key Resources

Foodpanda’s main resources are its technology, sales, and customer service staff members. In addition, as a relatively new start-up it has relied heavily on funding from outside parties, raising $318 million from six investors as of April 2015.

Cost Structure

Foodpanda has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed cost. Other major drivers are in the areas of customer support/operations and administration, also fixed expenses.

Revenue Streams

Foodpanda has two revenue streams:

Transaction Fees – The company charges listed restaurants a commission for all purchase transactions made; while this figure is not made public, some sources estimate it at 7%.

Advertising Fees – The company charges third-parties a fee to advertise their offerings on its website and in its mobile app.