Deliveroo to exit HK market after 9 years of operation

Online food delivery platform Deliveroo announced on Monday that it will wind down its operations in Hong Kong after nine years of business in the city.

Deliveroo’s platform in the city will remain live until April 7.

In a press release, the British company said it has decided to exit its Hong Kong operations through a sale of certain assets to another delivery platform foodpanda -- a local competitor of Deliveroo -- and the closure of other assets.

It has nominated liquidators to manage closure of the Hong Kong business and the remainder of its assets “in the most efficient way possible.”

“There are several dynamics specific to the Hong Kong market which led the Board to consider strategic options and, given the Group’s commitment to disciplined capital allocation, determine that it would not serve shareholders’ best interests to continue to operate in Hong Kong,” the statement read.

Deliveroo’s chief operating officer Eric French said: “We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved in our operations in Hong Kong. We have been proud to serve so many people such amazing food over the past nine years.”

Deliveroo, a London-based online delivery platform, launched its business in Hong Kong in 2015. It has partnered with over 10,000 restaurants and riders respectively, according to Nick Price, Deliveroo’s Hong Kong general manager, in January 2024.

Delivery Hero, parent company of foodpanda, said it has acquired selected assets from the winding-up firm.

This will see Deliveroo customers and riders redirected to the foodpanda platform, as well as certain restaurants and grocery shops, it added.

“This transaction will give customers on the foodpanda platform access to a wider range of restaurant and grocery businesses, including some only available on the Deliveroo app. Vendors joining the platform will be able to tap into a new customer base to boost their long term success,” it said.

Delivery Hero described its decision to further invest in Hong Kong as “part of its commitment to maintain a sustainable delivery ecosystem that provides the best value for its foodpanda customers, couriers and business partners.”

The announcement marked Deliveroo’s another departure from the Asia market, after it quit Taiwan in April 2020 during the Covid-19 pandemic. 

Brian Lo, then general manager at Deliveroo Hong Kong and Taiwan, said then the withdrawal from the Taiwanese market would not affect the company’s business in Hong Kong.

Economist Simon Lee Siu-po is not surprised by Deliveroo’s withdrawal from Hong Kong, as the city’s market for food delivery services is small and highly competitive, making it difficult to accommodate three competitors.

He pointed out that the food delivery market share is relatively small because there are alternatives to delivery, such as going out to buy food yourself or restaurants providing their own delivery services.

Combined with the shrinking local dining market compared to pre-pandemic times and cross-border consumer spending, as well as discount-driven customers, the food delivery business has become increasingly challenging, Lee added.

Speaking to The Standard, Mak Tak-ching, organizer of Riders’ Rights Concern Group, stated that he did not immediately receive any requests for assistance related to Deliveroo, as the platform is still weeks away from halting its operations in Hong Kong.

However, he voiced concerns about potential labor rights issues, noting that many delivery couriers are classified as self-employed under labor laws.

As a result, they generally lack protections such as wage security or compensation for work-related injuries.

Noting that the Legislative Council will discuss the protection for digital platform workers on March 24, he called for policy and law changes to better protect delivery platform workers.

In addition to Deliveroo, the other two major on-demand delivery platforms in Hong Kong are foodpanda and Meituan’s Keeta which joined the market in May 2023.

(Jamie Liu)
 

Read more:
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