Updated January 1st, 2024 at 20:02 IST
DoorDash plans expansion outside core restaurant business in US
Focusing on untapped territories, the company ventured into Austria and Iceland through Wolt.
- 2 min read
DoorDash aims to diversify beyond its core meal delivery service, intending to expand globally and delve into non-restaurant sectors with its burgeoning cash reserves. CEO Tony Xu highlighted the company's focus on venturing outside the US and diversifying beyond meal delivery in a bid to utilise its €7bn acquisition of Finland's Wolt, extending its reach across 27 countries.
Having amassed a significant cash flow of $878 million in the past 12 months, DoorDash is poised for strategic investments and market penetration. Focusing on untapped territories, the company ventured into Austria and Iceland through Wolt, mirroring its interest in smaller regions akin to American suburban areas.
While the pandemic fueled exponential growth for food delivery services, post-lockdown relaxation saw a slowdown in sector expansion, prompting analysts to anticipate consolidation. DoorDash, however, maintained momentum, reporting a 27 per cent rise in third-quarter revenue, outperforming competitors like Delivery Hero and Just Eat Takeaway.
Despite market volatility and decreased valuations compared to the pandemic peak, DoorDash's share price more than doubled last year, propelling its market cap to $39.4 billion. The company plans strategic stock buybacks, endorsing confidence in its trajectory and potential.
Beyond meal delivery, DoorDash ventures into alcohol delivery across 20 US states, Australia, and Canada, while also bolstering its advertising business for restaurants and other brands. Emulating peers like Deliveroo, the company eyes expansion into retail, grocery, and convenience sectors, leveraging its substantial consumer and driver base.
Partnering with supermarkets like BJ’s Wholesale Club and retail giants such as Dick’s Sporting Goods and Sephora, DoorDash endeavours to make inroads into grocery and convenience, capitalising on a lucrative market niche. Analysts foresee this pivot as a pivotal move, backed by the company's expansive user base and driver network, offering promising prospects for growth beyond meal delivery.
(with Reuters inputs)
Published January 1st, 2024 at 20:02 IST