Foodpanda Business Model | How Foodpanda Makes Money

Foodpanda is a big name in food ordering and delivery service providers in the world. It is operating in 50 countries and territories headquartered in Berlin, Germany and is owned by Delivery Hero SE.

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How does foodpanda works?
Foodpanda has a simple website and app interfaces bridging the gap between restaurants and their customers.
Foodpanda has a food ordering app which the customer/user can use to order food from local restaurants. The user will see the nearest open restaurants ready for delivering food and the user can easily select food of his choice from his preferred restaurant. Once the food item is added to the cart user can check out and pay via online payment gateway or cash on delivery.

Once the order is confirmed a notification goes to the restaurant on their merchant app. The restaurant has to confirm this order and start preparing the meal for its customer.

Meanwhile, as the order is confirmed from the restaurant, a broadcast signal is sent to all the nearby delivery partner on their delivery partner app. The one who accepts this request is assigned the responsibility for delivering the food order.
The delivery partner reaches the respective restaurant to pick up the food order and takes it to the customer.
A customer can track all the process from the preparation of food till doorstep delivery of food on their app. Live location tracking is a famous trend in food ordering and delivery businesses.

How does Foodpanda make money?

1. Registration fee from restaurants
Foodpanda has a registration fee for restaurants to add their listing on their app. These restaurants once added on Foodpanda can be seen to customers searching for local restaurants. This registration amount is about $100 to $150. This is a one-time registration amount.

2. Commission from restaurants
Foodpanda charges a commission from restaurants on every food order that they receive through foodpanda platform. This commission is usually between 15% to 25% inclusive of all taxes.
Depending on the restaurant location, the dependency of a restaurant on foodpanda and number of orders, the commission is charged considering these factors.

3. Delivery charges from customers
There is a delivery fee for every order that a customer place on the app. Other than this there are taxes which has to be paid by the customers.

4. Advertising
Foodpanda is a marketing platform for many restaurants, especially for new ones. Visibility of restaurants increases by registering on Foodpanda. Moreover, restaurants can pay a certain amount to advertise their brand on the app.

5. Affiliate income
Foodpanda makes money by giving suggestions for credit cards of various banks to its customers. Also, banks give discounts and offer on their cards in order to make more transactions through their bank. This helps Foodpanda and its users as more customers are willing to pay online.

Sources of Expense for Foodpanda

1. Development and maintenance cost of online ordering system including website, merchant app, customer app, delivery partner app, and backend system for managing all of these systems.
2. Salaries and provisions to full-time employees.
3. Salaries and incentives to delivery partners.
4. Administrative costs
5. Benefits are given to customers in the form of offers
6. Returns and refunds
7. Miscellaneous expenses

Future of Foodpanda
Foodpanda is offering its services across the globe and turning out to be a great competitor in the food ordering and delivery services. Rebranded as Foodora in all other countries except in India. Foodpanda was acquired by Delivery Hero in December 2016. Later, cab aggregator Ola in India has acquired Foodpanda in the Indian market in December 2017.

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