Deliveroo’s Singapore exit may lead to higher fees, fewer discounts, analysts say

Experts pointed out that Grab’s super-app ecosystem – spanning ride-hailing, payments and rewards – allows it to cross-promote across services and generate additional revenue through advertising. 

Prof Wirtz pointed out that while Foodpanda was not a super app, it monetised ads and retail media, especially via Pandamart and fast-moving consumer goods brand partnerships.

“Deliveroo had sponsored listings and co-funded promos, but with a smaller audience and fewer surfaces, its ad monetisation was relatively limited,” he added.

Last year, DoorDash acquired Deliveroo with a view to growing its market share in Europe.

“Given Deliveroo’s limited growth trajectory in Singapore, it is likely that the market was not considered a strategic priority within DoorDash’s broader global portfolio,” said Asst Prof Tsai from NUS.

SMU’s Assoc Prof Ramaswami noted that the industry could be entering a slower growth phase following the pandemic-era surge in demand, and may even decline.

Challenges remain even with only two competitors. They still face headwinds in the form of price-sensitive consumers, rising operating costs, as well as the ongoing challenge of maintaining reliable rider supply and service, NTU’s Asst Prof Lee said.

Asst Prof Tsai said that the platforms may shift away from simple user acquisition, and that it was no longer sufficient for a platform to maintain market share in food delivery alone.

“Platforms increasingly rely on ecosystem bundling (eg integrating delivery with ride-hailing, payments, subscriptions, or loyalty programmes) to retain users, increase order frequency, and improve overall unit economics,” she said.

“In such a mature market, profitability, customer retention, and ecosystem integration become more important than the rapid expansion strategies observed in the earlier growth phase.”

Assoc Prof Ramaswami raised the possibility of new entrants who may see an opportunity to differentiate themselves from the two remaining players.

Other delivery services, such as Lalamove, are also in a position to enter the food delivery market, as they have delivery fleets and the logistics infrastructure.