Foodpanda Case Study: How the Billion Dollar Startup Model Failed?

Foodpanda (or Hello Food) is a leading online food distribution marketplace with a global presence. Its primary function is to allow users to place orders at nearby restaurants using its website or mobile app.

Foodpanda is only used in Asia and Europe, but it also operates in Africa, Latin America, and the Middle East under HelloFood.

Foodpanda debuted in Singapore in May 2012 and quickly became a hit. It had spread to 16 countries across the world by the end of the year & successfully extended its market to 23 countries worldwide by the end of February 2013. It now has a presence on five continents and in over 500 cities around the world. They have a substantial global team of more than 3700 workers and are partnered with over 38000 people.

In 2012, Ralf Wenzel and Benjamin Bauer worked together to create Foodpanda. The company's headquarters are in Berlin, Germany.

Ralf Wenzel is the global CEO of Foodpanda or Hellofood and one of its co-founders. He graduated from Berlin University with a degree in computer science & was the Group Chief Operating Officer at Skrill Holding before becoming the CEO of Foodpanda. Before that, he worked at Jamba/Jamster as a Senior Vice President of Sales and Business Development.

Foodpanda's other co-founder and Chief Marketing Officer is Benjamin Bauer. He holds a Master of Science in Business Administration from WHU and a Bachelor of Science in Business Administration from Maastricht University. He worked with venture capital companies in San Francisco and Munich previously.

As the business grows, they are working to broaden their network of distribution options in each region. "Foodpanda service is all about delivering the most famous dishes around Singapore from kitchen to doorstep as quickly as possible," according to Jakob Angele, CEO of Foodpanda Singapore. Since we now have our fleet of riders, our service is more reliable and faster than ever, ensuring that food is delivered on time." If the organization tries to gain market share in each of its geographic areas, the logistics of its distribution system will undoubtedly be a key priority.

Because of their user-friendly, high-quality, and robust interface, Foodpanda has become an instant worldwide sensation. They've worked hard over the years to improve a variety of features to boost their web traffic. Customers can order their favourite cuisine using either the Foodpanda website or the Foodpanda app. Both the website and the software work in a similar way.

Foodpanda's ordering method follows a step-by-step procedure. First, Foodpanda collects the customer's postal details. The information is then filtered based on the details of restaurants in the region that offer delivery. In addition to the basic restaurant offers, there are several additional bonus deals that a customer can use when ordering via Foodpanda on both the website and the app.

The restaurants' menus are further divided into subcategories based on the type of food they offer. Customers receive a confirmation message from the Foodpanda operators after placing an order, and they are notified of the expected delivery time. Foodpanda sends the order details and the customer's contact information to the restaurant if there are any issues with the food delivery. Of course, Foodpanda's popularity is focused not just on its restaurant partnerships but also on its fleet of couriers.

Foodpanda's loss can be attributed to several factors, including fake restaurants and orders, miscommunication, technological issues, unstructured business models, and a lack of ownership. Few people were aware that Rohit Chadda and his brother Mohit Chadda had left the business in August 2016. The company's workers were unaware of the ongoing issues; they were getting calls from clients, and if they did not deliver food, they were given free vouchers.

Because these types of free vouchers were lucrative to them, the number of fake customers increased? What caused this to happen? The flaw was that neither the business nor the restaurants followed up with the customers. It was a deal between the customer and the restaurants when a customer chose a restaurant from their website. Foodpanda was utterly unaware of the order. Several restaurants and consumers took advantage of Foodpanda in this way, contributing to the company's demise.

On May 16, 2016, a Mumbai-based fast-food chain ended its partnership with Foodpanda, claiming it owed the delivery service company 1.5 lakh rupees and that the company was delaying payment. The real explanation for this was that Foodpanda had no record of such an order or transaction. This decade saw an explosion of the Internet and a boom in digitization, and this delivering service struggled to keep up with the evolving demands of digitized customers. Several restaurants were identified as closed or indefinitely closed on the app. Food panda may have made such a blunder because it did not want to lose customers. However, the plan was largely flawed.

Customers and restaurants often complained about Foodpanda's lack of communication. Customers would often call restaurants to inquire about the delayed delivery, but the restaurants were unaware that consumers had put on order the app. Foodpanda failed to communicate about cancelled orders, and their quick actions and miscommunications brought the company to its knees.

Rohit Chadda, the co-founder and managing director of Foodpanda, founded Ziner in 2014. Ziner's website and data seemed to be close to Foodpanda at first glance. Chadda said that he did not own such a company and that Foodpanda's data was not shared with anyone. The company has made over $300 million in sales from Rocket Internet and Goldman Sachs since 2012.

In 2016, more than 100 employees left the business after four years in various locations such as Delhi, Mumbai, Pune, and Gurgaon, and their stories paint a very negative image of the situation. Tasty Khana, based in Pune, was acquired by Foodpanda in 2014. Sachin Bharadwaj, the company's founder, was extremely dissatisfied with the lack of procedures, fake orders, fake transactions, financial irregularities, open Excel sheets accessible to everyone, and general mismanagement. At this stage, Foodpanda's demise had become inevitable.

Market volatility and fierce rivalry may be a roadblock, but there are ways to get around them. "Man proposes, God disposes," as the saying goes. You never know what will be available in the future; what you think is right now will not be so in the future. It would help if you took such precautions, such as talking to experts in-depth, to avoid making business mistakes like Foodpanda's failure and mental turmoil. Years of experience have honed their technical skills and business acumen, both good and bad.