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The food delivery app in the US for Dash has launched in Japan, marking the company’s first foray into the Asian market and the latest measure by a large distribution group to expand globally to trigger a pandemic-driven demand boom.
DoorDash, a leader in the US market, said the measure would give it access to one of the densest countries in restaurants in the world, although it would start relatively small.
Emulating its U.S. strategy, where it first focused on suburban areas outside major cities, DoorDash said it had listed “hundreds” of restaurants in Sendai, a city in northern Tokyo with an approximate population of 1 million.
“It’s a very underserved market,” Tony Xu, chief executive, said in statements to the Financial Times on Tuesday, describing Sendai as a “microcosm” of the country as a whole. “Across the country, in Japan, as we’ve seen, the most generous estimates are for 10% of traders who take delivery. So I think it’s the first few days.”
Japanese restaurant culture means people tend to stop and eat back home, instead of asking for food to deliver, but newcomers see an opportunity for the growing population of retirees and dual-income families.
The move comes as major app delivery companies are aggressively expanding into new markets, betting that habits formed during pandemic-related closures will become permanent. At the peak of the lockout measures in the U.S., DoorDash’s revenue rose more than 200 percent, pushing them to an initial box office offering that raised nearly $ 3.4 billion for the company.
Last month, reported the Financial Times DoorDash was preparing to launch in Germany, another hotly contested market that will pit the company against Just Eat Takeaway and Delivery Hero, as well as Uber Eats, which he told FT in April he planned to launch into Europe’s largest economy in a few “weeks”.
Meanwhile, through the acquisition of Grubhub, which has not yet closed, Just Eat Takeaway will establish its first presence in the United States, jeopardizing DoorDash’s U.S. market share of more than 50%.
In Japan, DoorDash will face well-known opponents but also well-established local players.
“It will definitely be very difficult,” Xu said. “When we talk about an investment like Japan, we’re talking about a multi-year investment of more than ten years.”
Uber Eats was launched in the country in 2016, followed in 2020 by Delivery Hero and China’s Didi Chuxing. Tokyo-based Demae-can has partnered with nearly 60,000 merchants and has 5.82 million active users. It also offers a wide range of services, such as mail order and dry cleaning.
DoorDash will also have to contend with a number of powerful local businesses in adjacent markets, including grocery delivery cooperatives and Yamato and Sagawa parcel services.
Although DoorDash has begun to expand into convenience store items in the U.S., Xu said he would not rush to make similar moves in Japan.
“It’s crawling, walking, running,” he said. “We definitely don’t want to make mistakes just by trying to copy and paste what we’ve seen possibly work in other geographies. I think for us we will have to build a very Japanese product ”.
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