Food hailing concept may be new in South Africa, but is fast catching up almost like ride -hailing. That would have motivated Uber Eats to make its footprint in the food delivery segment also. Of course, its undisputed domination in ride hailing would have helped the San Francisco based company to score early brownies.
That does not mean the internet -based food delivery company did not have any trials and tribulations. It did learn from mistakes. The decision to launch the home delivery at the high-end food segment was clearly a miscalculation. Pragmatism demands learning from mistakes. The company quickly changed the gears to position itself in the middle -class segment. The results are there to see. Backed by its massive network in the ride hailing segment, Uber Eats is attracting more clientele.
The market for food delivery is estimated to be big in South Africa. Experts say the market could be US$713 million in 2019. The anticipated growth rate could be as high as 14% per annum, which can take the business volume to 17.6 billion rand by 2023.
It is not alone location and price but also recipe that decide the success of a food delivery system. After the initial lacklustre response from its high-end clients, Uber Eats is now focused on middle class, whose tastes and preferences are different in many ways.
Its launch in Soweto, a middle- class centre has proved to be a game changer. It has now 20 partners, 48,000 menu items that middle class prefer, such as stewed tripe, caterpillars, cow heels and sheep’s head: to name a few. Though still in red, Uber Eats is the company’s fastest-growing business, contributing more than 10% of its quarterly revenue of US$3.8 billion. There are peculiar benchmarks to measure the efficacy of a food delivery network. Uber Eats fit that bill: two million people downloaded its app, and the company has 700,000 active monthly users and processed over 1.5 billion rand orders over twelve months.
Uber Eats is not the only one to chase the pie. It has competitors and more number of companies are in the fray to give it a chase for its money. Important among them is Bolt, the Estonian company, which is also a player in the ride hailing segment. It is expected that Bolt may launch its operations early this year. It is likely more companies may join the fray. Significantly, all of them have a ride hailing background, understandably since such companies have more data on concentration of population and their income levels measured in terms of type and frequency of rides they make.
