According to its finance head, Delivery Hero, the German parent company of food delivery service Talabat, is considering increasing its investments to capitalize on the first-half momentum and gain more market share.
The Berlin-based company increased its revenue and gross merchandise volume forecasts for 2021 but lowered its adjusted core operating margin prediction to minus 2 percent, which is at the lower end of its previous forecast.
The company returned to Germany early this year amid a frenzied rise in fast delivery, putting it against start-ups like Gorillas, which are drawing costly funding from venture capitalists.
Mr. Emmanuel Thomassin, Delivery Hero’s Chief Financial Officer commented that “We are considering investing a little bit more, the additional investments would be in core operations, while the $645.77 million full-year investment goal for new markets remained unchanged.”
Delivery Hero has invested heavily in both food delivery and so-called rapid commerce, which tries to deliver goods in as short as 10 to 15 minutes, in response to the surge in demand for at-home deliveries during the pandemic.
The company, which operates in around 50 countries across Europe, Latin America, Asia, the Middle East, and North Africa, now expects revenue of $7.5 to $7.86 billion this year, up from $7.51 billion to $7.74 billion previously.
Mr. Niklas Oestberg, CEO of Delivery Hero remarked that “Quick delivery will be a huge part of Delivery Hero. But the margins in groceries are incredibly low, to make it economical we need to innovate and improve. It is still a long way to go.”
Supported by strong demand for its food and speedy delivery services, the firm more than doubled quarterly revenue to $2.12 billion, even as pandemic-related limitations were removed across its markets.