future startup logo

Daily Update: With Pandamart, Q-Commerce, Home Cooks, Foodpanda Eyes Aggressive Expansion Across Multiple New Verticals In 2021

Multinational on-demand food delivery company Foodpanda is doubling down on keeping its gain from the coronavirus pandemic, building on it, and expanding the gain across verticals. 

Foodpanda, with an aggressive growth push coupled with relentless investment in logistics and technology, has been able to push past an apparent growth plateau majority of on-demand services suffering from in Dhaka. The company now eyes a number of new verticals as a new battleground. 

The expansion efforts will help the company expand its market and find new growth opportunities. At the same time, it will pit it against a number of serious competitors from across verticals such as grocery, and then every vertical has its own growth challenges. 

Foodpanda, being an aggregator in food delivery, enjoys certain advantages. The hypothesis, as I explained here, is that it can cross-sell customers - customers coming for food will buy groceries and daily essentials as well and create and amplify a virtuous cycle of demand aggregation. It will be interesting to see how Foodpanda manages growth challenges and competition in these new verticals. 

Going deeper

1/ Foodpanda started the push about two years ago with several growth initiatives such as removing minimum order value, offering hefty discounts, and improving delivery time in the face of competition from players like Pathao Food and others. During the same period, the company has invested in logistics and technology to improve customer experience, efficiency, and gradually bring down discounts. In a recent interview with TBS Foodpanda Managing Director Zubair Siddiky pointed out that investment in logistics and technology has helped the company “reduce delivery time, improve order tracking and order management, and ensure a superior customer experience.”

2/ Foodpanda also actively pursued geographical expansion throughout 2019 and 2020. You can now use Foodpanda service in 64 districts of Bangladesh. 

3/ Foodpanda launched Pandamart in December 2020. The company has launched several Pandamart warehouses in and outside Dhaka and aims to expand the service country-wide within 2021. Pandamart offers speed and convenience to consumers by making thousands of daily essentials available for on-demand delivery within 15 to 30 minutes. Pandamart manages its own inventory of groceries and daily household items that allows it to have full control of the supply chain. Pandamart has around 4,000 items across 25 categories, ranging from regular household staples to baby products and cleaning supplies. Foodpanda directly works with producers and manufacturers.

4/ One significant development is the expansion of Foodpanda’s home chef program, where it works with hundreds of home cooks, mostly women, who prepare and sell foods through the Foodpanda platform. Working with home cooks offers a number of benefits to Foodpanda. It increases selection, quality, competition and price for customers. Home cooks naturally can offer better pricing, which means Foodpanda can effectively create alternatives to expensive restaurant foods. This should help Foodpanda expand its market into the affordable daily meal service category. It should improve Foodpanda’s margin because home cooks can offer a relatively higher margin since their cost is relatively low. 

6/ Foodpand introduced quick-commerce. Foodpanda Shops now feature leading retail chains such as Unimart to Shwapno and small corner shops. At the intersection of Pandamard, q-commerce and Foodpanda Shops, the company effectively gets into everything delivery. These are fascinating developments with many second order consequences. From With Pandamart, Foodpanda Aims to Become Everything Delivery Service:

“Pandamart has attracted quite a bit of attention for its grocery delivery service since Foodpanda launched the service in April in collaboration with Shwapno. But it is not only a grocery delivery service. Rather it is an on-demand delivery service for everything essential. The expansion can be viewed from two perspectives that Foodpand has built enough operational muscle and sees a lucrative opportunity in these new verticals and that Foodpanda needs to expand beyond food delivery to build a large enough business making it inevitable for the company to expand into these new verticals while its business in food delivery remains limited in scale. Regardless of how you view the expansion, it is an important event in Dhaka’s tech space and indicates that with enough cash in your pocket you can chase multiple verticals at once and tech marketplaces can and are willing to pursue growth in every relevant vertical where there is a possibility of growth.” 

Pandamart follows Foodpanda’s aggregation model. Foodpanda’s food delivery business aggregates demands for ready food that it delivers through its partnership with restaurants and home chefs. For customers, Foodpanda offers convenience. For restaurants and home chefs, it generates orders. 

Pandamart and Foodpana shops expand this model across verticals. Foodpanda is now effectively a delivery service for anything and everything. Again from With Pandamart, Foodpanda Aims to Become Everything Delivery Service:

“Pandamart is yet another way for Foodpanda to leverage its market power gained through demand aggregation in the food delivery business. This time it’s about expansion. With Pandamart, Foodpanda aims to replicate with grocery shops, pharmacies, essential items shops, what it has done with restaurants. The majority of offline retail stores don’t have a mechanism for managing and fulfilling online orders. These shops don’t have a way to accept online orders aka a website. They often don’t have a logistics system to execute deliveries. Foodpanda offers both to these shops. As the business grows, Foodpanda is likely to use the playbook it used for food delivery for growing and building Pandamart business such as setting the stage for asking for a better commission, getting deeper into the supply chain, and launching white-label brands, and so on.”

Foodpanda’s expansion into grocery and other daily essential products likely to create competitive pressures on players in the sector such as Chaldal and others. Having said that, while Foodpanda has certain leverages, expansion has challenges as well. I wrote in With Pandamart, Foodpanda Aims to Become Everything Delivery Service

“Aggregating demand using aggressive acquisition techniques and then trying to sell more services to the same customers has been one of the defining trends in technology company building space for the last two decades. Companies take an aggressive customer acquisition approach in one vertical and then use that demand aggregation to expand to other relevant verticals. While the strategy makes for a great narrative and a perfect sense on paper, in reality, it is often a tall order. The challenge comes from three areas: 1) having a large number of users for one service does not automatically make you capable of delivering a completely different service/product to the same users. For example, the dynamics, economics, and supply chain of grocery delivery are quite different from ready food delivery. Building expertise and then offering quality service in a new vertical is often expensive and takes time. 2) while the internet allows aggregation to an extreme extent, most delivery businesses are not pure software businesses. There are strong and critical offline components involved. Aggregating users for a software solution is easy but it is unlikely to be the same for something like grocery. 3) Users necessarily do not prefer a general aggregator that does everything over a specialized business that operates in a certain niche and thus can offer greater depth and superior service in that niche.”

Foodpanda has certain leverage. The company has cash and is willing to push through challenges. Being a multinational operation, it can glean insights from other markets and apply them into the Bangladesh market. 


Foodpanda was launched in Bangladesh in 2013. While there are emerging competitors in the food delivery space, Foodpanda remains clearly ahead of the pack. As the company moves into more verticals, we will have to wait to see how its growth push plays out for its food delivery business as well for existing players in these verticals. 

Mohammad Ruhul Kader is a Dhaka-based entrepreneur and writer. He founded Future Startup, a digital publication covering the startup and technology scene in Dhaka with an ambition to transform Bangladesh through entrepreneurship and innovation. He writes about internet business, strategy, technology, and society. He is the author of Rethinking Failure. His writings have been published in almost all major national dailies in Bangladesh including DT, FE, etc. Prior to FS, he worked for a local conglomerate where he helped start a social enterprise. Ruhul is a 2022 winner of Emergent Ventures, a fellowship and grant program from the Mercatus Center at George Mason University. He can be reached at ruhul@futurestartup.com

In-depth business & tech coverage from Dhaka

Stories exclusively available at FS

About FS

Contact Us