BUSINESS

Plenty of growth prospects seen in online food orders

VANGELIS MANDRAVELIS

TAGS: Food

Food delivery is a 1.5-billion-euro business in Greece. Of that, online orders account for 20 percent of the market, or 300 million euros.

The online delivery business is an oligopoly. The market is currently controlled by two businesses, the German-based Online Delivery and the Patra, Greece-based Delivery.

The first of the two controls e-food.gr, clickdelivery.gr and deliveras.gr, and has cornered 90 percent of the market, while the Greek company operates the delivery.gr site, getting the remaining 10 percent share of the market.

The two site operators charge a 10 percent commission, which brings in a total of 30 million euros. This oligopolistic, or really nearly monopolistic, market is the result of acquisitions.

The three sites controlled by Online Delivery were once operated by three different Greek companies. These were acquired by German firm Delivery Hero, which placed them under the Online Delivery umbrella. In fact, Delivery Hero came very close to buying out its only competitor.

The two had agreed to sign a deal on July 3, 2015, two days before the referendum that the government at the time decided to call on the EU austerity deal. However, the calling of the referendum resulted in the imposition of capital controls on June 29 and the German side backed out of the deal.

Subsequently, a Greek company, Mouhalis SA, acquired a 60 percent in Delivery, but the latter’s founder, Nikos Ioannou, who retained his 40 percent stake, remains the company’s CEO.

Delivery Hero has invested some 30 million in the Greek market. The investment has turned profitable: Last year, its Online Delivery operation posted a profit of 10 million on turnover of 28 million. The net profit margin is 30 percent. It has proposed distributing a dividend of 8 million euros.

The company’s three sites see 50,000 orders daily and market watchers believe there is much room for growth.

This has whetted the appetite of others preparing to enter the market, such as OTE Telecom, Greece’s Skroutz and Finnish company Wolt.

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