Aurora Magazine

Promoting excellence in advertising

“There are phenomenal opportunities for more delivery players”

Published 07 Jan, 2022 02:27pm
Interview: Nauman Sikandar Mirza, CEO, Foodpanda.

ZEENAT CHAUDHARY: How has the growth of Pandamart been since its launch last year? NAUMAN SIKANDER MIRZA: Pandamart is currently the largest online delivery player in the market, in terms of having the largest physical network of dark stores (we have thirty six 5,000-6,000 square feet stores across Karachi, Lahore, Islamabad and Rawalpindi). We can deliver products to customers within 15-20 minutes because of the number of dark stores we have.

ZC: Who would you say are Pandamart’s competitors and what are the current challenges, if any, it is facing?
Airlift Express, Grocer App and some other companies operating in different regions, along with individual grocery stores which deliver. However, looking at the population to delivery service ratio, we are capturing about 1% of the population, so there are phenomenal opportunities for more players to come into the business. The more players there are, the more consumers will become aware of such services. The company that consistently gives a good customer experience will have the largest market share. The challenges are more internal rather than external – for instance, our tech stack is not completely mature, but we are working with tech teams in Singapore to build one that is more sophisticated.

ZC: In what ways does Pandamart differentiate itself from other players?
If you search for a product on the app, which is unavailable/out of stock for the moment, it will not show up at all. We do not want to make false promises followed by cancellations... this is how consumer confidence breaks. Grocery delivery is different from food delivery in this sense - if you want McDonald’s and it is closed, you will go to OPTP for example. But with grocery you won’t easily substitute one brand with another, whether it is pampers, milk or toothpaste. You’d rather go and get the item if it is not available.

ZC: Earlier this year, in a interview, you stated that Foodpanda Pakistan can break even by 2023. Is this still the case?
The figure was not accurate as I now believe we can break even by 2022, and start working towards profitability. We have been growing at a rate of 100% year-over-year.

ZC: In 2018, you stated that 80% of Foodpanda customers prefer COD. Is that still the case?
Currently, our credit card penetration rate is 25-30% of our customers – probably the highest for any company in Pakistan. This can be attributed to the fact that in the recent past we have had a dedicated team working to make online payments more and more convenient. We have also partnered with banks like HBL and Meezan Bank to lure in more credit card customers. Following this, we have had customers who order more than 150 times a month – some even use Foodpanda to order food or grocery four to five times a day. This is also because in Pakistan people sometimes order for family members and friends.

ZC: What made Foodpanda launch ‘Home Chef’ (HC) and how has the category been doing so far?
We are not in the business of food delivery; Foodpanda is a medium which we use to get food to you – we are in the business of fulfilment of hunger. Every time you feel hungry, we can provide food to you and delivery is one of the methods for that. Nowadays, a lot of people in Pakistan consume home-based food because it is cleaner, more hygienic and lighter on the pocket. We figured that if we could replicate that food on our platform we could get more consumers on board. With restaurant food delivery you can capture four to five meals per month from a consumer, but with HC the possibility is 19 meals a month. Secondly, the restaurant density in Pakistan is very limited. In Bangkok, there are eight million people and 100,000 restaurants. In Pakistan, which has a population of 200 million, we have 20,000-30,000 restaurants which we are working with, and overall there might be 50,000-60,000.

ZC: How do you advertise HC and convince people to start becoming home chefs?
We do a lot of online advertising, referrals and events; we go to universities, run ads on our social media pages. The gist is that if you want to make X amount of income and can cook well, please come on to our platform. We get thousands of applications. Then we have a criteria potential HCs need to fulfill: how much funding does a person have, age of experience in the business etc. We guide them through setting up their HC account on the app (listing their menu, popular items, pricing, imaging etc.) and then the HCs operate their accounts.

ZC: What kind of demographic is the HC audience made up of?
So far, the HCs are predominantly male. Initially it was more women, but now there are more males (men to women ratio is 60:40).

ZC: What is the approximate amount one can make as a HC?
Some of our top HCs make Rs 1.8-2.0 million in revenue per month. Others make more than Rs 500,000 a month. We have 4,000 HCs working with us monthly. They need to meet a minimum of a four star rating, and if they do not then we give them two months to become better – if they don’t then they are off boarded. The best rated chefs are rated 4.5-4.7. HC is only in KLI for now, but we are testing it in Sialkot. Will take it to other cities if this works out.

ZC: Can you talk about Foodpanda’s latest venture, Pandafly?
It is a large food delivery drone, which we tested recently, one which is not meant for delivering directly to consumers’ houses. It stops at a certain point, from where a rider takes the food and delivers it to the customer. For example, around 10,000-20,000 people reside in Bahria Town, and have access to 10 local restaurants. Customers there have very few options, so how do we get food to them? With normal delivery, the food will deteriorate by the time it reaches them from a restaurant that is far away. So what we can do is offer restaurants that are 5-10km away such as from places like Gulshan and Malir. The restaurants there will be available to the people of Bahria Town. The delivery fee might be Rs 100 rupees as opposed to Rs 50, but when they place an order, the rider will be able to take the order from a certain point (where the drone will land) and deliver it forward to the customer.

ZC: Who manufactured the test drone, and how much weight can it carry? NSM: One drone costs around $5,000-6,000 to create and is manufactured locally by Woot Technologies. Since it does not run on fuel, the cost of delivery is low. One drone can carry about five kilos (so multiple orders at a time). If we decrease the weight we can increase the speed of the drone. The drones are fully ready but we are not allowed to fly them due to government regulations.

ZC: Are there any challenges with this technology?
Of course. You find out about issues once you start using a new technology, so we still need to see if this will work 100%. Even though the drones might not be feasible today, they will be some day!