Online food ordering and delivery services have witnessed phenomenal growth in Pakistan over the years and the Covid-19 pandemic has further accelerated this growth. While unlocking the digital potential of the country and utilizing the latest telecom technologies, these food delivery services are transforming lives with innovations and offering convenience along with powering the country's economic growth. The sector is offering jobs to thousands and supporting women’s empowerment.
Money Matters speaks to Khwaja Shariq Mustafa, the Commercial Director at foodpanda who talks about the challenges and future plans for the next year.
Q: What are the challenges that the convenience-delivering platform is facing currently?
A: The global recession has had a sizable impact on Pakistan as well. Prices have gone up in Pakistan. The inflation rate is at an all-time high and during these times we must make sure we build a sustainable way to our growth. The cost of a product that used to be 25-30 percent for the owners has now gone up to 65-70 percent then add to it the rent and electricity, the costs of which have also doubled, and all these factors impact the menu price. For the consumers, this is also a big blow as their disposable income is now limited. To put things into perspective, even an increase of Rs1 or 2 on anything can have an impact on the overall percentage of orders.
Another challenge right now is the restaurant density in Pakistan, which is already low and is further declining rapidly due to inflation. We are trying to control the losses, optimize operations, and focus on growing at places where we haven’t achieved the desired level of growth because of the restaurant density. We’ve been providing livelihood to thousands of riders; we’re working with around 50,000 riders at various points in time as they are free to work at their own convenience. The fact that they’re still working with us for years is because they’re making some money and that money gives sustenance to so many households in Pakistan.
Q: What’s your ultimate vision for foodpanda? Where do you see it in the near future?
A: We have rapidly grown over the past few years and are present in 35 cities across Pakistan today. While our primary focus is Karachi, Lahore, and Islamabad-Rawalpindi, other tier 1 cities including Faisalabad, Multan, and Quetta are finally catching up too. Apart from this, we are also actively running in other smaller and not-so-mainstream cities in Pakistan. The company’s mission is to bring good food into your everyday life, and I want to make foodpanda that is accessible and pocket-friendly.
Q: How are you working on making your vision come to life?
A: You should have food of all types from different cuisines and different price ranges accessible to you. Food occasions are very important for us too. Food is the biggest entertainment in Pakistan so during occasions like cricket matches we get a ton of orders because people want to enjoy their time together. People go out, have conversations over food, and people specifically dress up and go out to have food, so I want to create enablement for restaurants that cover all these categories while delivering it all at the right price.
Q: What’s your vision for the company given the new verticals that they’ve been launching?
A: Our primary focus now and for the next year is consolidation, subscriber growth, and profitability. We have altered our strategies a little when it comes to the growth aspect for the coming year apart from focusing on acquiring customers. We are also focusing on profitable growth.
Our business model is based on a symbiotic relationship between three stakeholders: consumers-restaurants-riders. Our focus is to optimize the 3 stakeholders and that is something we will always continue to do. But when you talk about innovation, we don’t just innovate randomly, we are mindful of scaling our business sustainably. We will continue to consolidate what’s working for us, but there are going to be no unnecessary innovations for things that are already working well for us.
Q: The company has tested drone delivery, any plan to launch it?
A: We have the data as well as the technology for it. The concept is to deliver good food to our consumers. Do we have the technology? Yes. But are our stakeholders ready? Will the restaurants be willing to learn to load food onto the drones? Will the customer be okay with receiving their orders via a drone? We are planning to launch a little trial in 2023 and then we’ll assess if this is a sustainable and profitable method of delivery.
Q: Any upcoming projects that you are currently working on?
A: foodpanda is collaborating with offices and corporate organizations where we’ll be taking our HomeChefs for the order the employees place through the app. About 8 percent of our order volume comes from HomeChefs whom we have been empowering through our platform for years now. Our new initiative, HomeChefs & Work, will scale their orders, give others a chance to try their food as well as take some burden away from the organizations that have to maintain a dedicated menu during lunch breaks.
The writer is a staff member