Hong Kong’s delivery scene shaken: Deliveroo announces departure amidst market overhaul
A significant shift is underway in Hong Kong’s bustling food delivery market as UK-based Deliveroo has revealed its decision to withdraw from the city, concluding its nine-year tenure. This move, scheduled for completion on April 7, 2025, comes as a direct result of the company’s struggle to maintain profitability amidst an increasingly competitive landscape, with a portion of its assets being acquired by rival Foodpanda.
Deliveroo’s exit underscores the intense pressures within Hong Kong’s food delivery sector, which has witnessed a dramatic transformation in recent times. The arrival of mainland Chinese competitor Meituan’s KeeTa has particularly disrupted the market, intensifying the battle for market share and forcing existing players to reassess their strategies.
The company attributed its decision to “several dynamics specific to the Hong Kong market,” emphasizing its commitment to “disciplined capital allocation.” Essentially, Deliveroo concluded that the financial viability of its continued operations in Hong Kong was no longer sustainable.
“We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved in our operations in Hong Kong,” stated Deliveroo Chief Operating Officer Eric French. “We have been proud to serve so many people such amazing food over the past nine years.”
As part of the withdrawal process, Deliveroo will sell certain assets to Foodpanda, its primary competitor in the Hong Kong market. The Deliveroo Hong Kong platform will remain operational until April 7, 2025, after which it will cease all activities. The decision to exit stems from financial losses incurred by Deliveroo’s Hong Kong operations, compounded by the escalating competition and the resulting impact on market share.
The entry of new competitors, notably KeeTa, has fundamentally altered the competitive landscape, placing significant pressure on established players. Deliveroo has announced that it will provide enhanced redundancy packages to its employees, surpassing statutory requirements. The company is also encouraging its riders to transition to Foodpanda, offering incentives for those who make the switch. Foodpanda has also stated that they will be moving Deliveroo customers, and some resturants, and grocery shops onto their platform.
Hong Kong represented 5% of group gross transaction value (GTV) for Deliveroo and had a negative impact on international GTV growth, further contributing to the decision to withdraw. This move signals a consolidation within the Hong Kong food delivery sector, with Foodpanda positioned to absorb a substantial portion of Deliveroo’s customer base. For consumers, this may result in changes to the available restaurant options and delivery services.
The rapid rise of KeeTa and its subsequent acquisition of market share highlights the dynamic nature of the food delivery market and the importance of adaptability. This exit also underscores the challenges faced by international companies operating in highly competitive Asian markets, where localized competition and evolving market dynamics can create difficult business conditions. The exit shows the volatility of the food delivery market, and how quickly it can change. The exit also shows the importance of being able to adapt to those changes, and to be able to compete with local companies.