Food delivery services eye prospect in Bangladesh:
- Industry insiders said Daraz acquired HungryNaki for around Tk8 crore
- Order volume-wise, HungryNaki was the fifth among the food delivery services
- 40,000-60,000 food orders delivered daily in the country
- Over 1 crore households in the country will register to order foods online by 2025
- Number of average daily orders would increase to at least 15 lakh
- The size of Bangladesh's food delivery market is doubling every year
Daraz Bangladesh, a concern of the Chinese e-commerce giant Alibaba Group, has acquired HungryNaki, the pioneer food delivery service company in Bangladesh.
Daraz has taken over all the tangible and intangible assets of HungryNaki at a time when the first homegrown food delivery company was going through a hard time.
The announcement was made in a joint press conference held at the Bangabandhu International Convention Center on Thursday, but none of the senior officials from the two companies disclosed the acquisition amount.
However, industry insiders said the deal involved around Tk8 crore.
Meanwhile, an investor of HungryNaki told the Japanese financial daily Nikkei Asia that as an investor he would be taking a large loss on the capital if the acquisition has not happened.
"This is not a success case for local entrepreneurs, rather a failure case for startups," he told Nikkei Asia.
However, HungryNaki CEO and Co-founder AD Ahmad viewed this acquisition as a positive sign for the other local start-ups and new entrepreneurs.
"We can definitely say that this is an auspicious moment for all of us because this acquisition by Daraz proves that our e-commerce industry is in an optimistic state," he said at the press conference yesterday.
Daraz Managing Director Syed Mostahidal Hoq said, "Daraz wants to be a platform for all, and food is the basic need of everyone. Here, we believe that acquiring HungryNaki is more ideal for us than building a new food delivery business from scratch."
"Daraz is the country's number one e-commerce place and our target is clear that we do not want to be number two in the food delivery business," he said, hinting at his future plan.
The food delivery market began to take off at the end of 2017 and its size is doubling every year, said people involved in this business.
The industry insiders' data suggests that currently 40,000-60,000 food orders are being delivered daily in the country on an average, of which around 80% are in the capital city.
Foodpanda with its widest nationwide coverage is currently delivering around half of the country's total daily orders, while eFood, a sister platform of Evaly, came up at number two with around 8,000 daily deliveries of food orders.
Pathao Foods started its journey with a buzz more than three years ago and began to lead the market for a while. Now it has reached the number three position among the food delivery services with an average of 4,000 daily deliveries.
Shohoz Food is strongly competing with its ride-sharing rival's food delivery business.
HungryNaki, the startup that pioneered the service in Bangladesh, came down to number five with around 2,500 deliveries on an average every day.
As a part of their central business plan, Uber Eats last year exited the potential market of Bangladesh, where a very strong middle class has already emerged. Their lifestyle is rapidly changing as they seek convenience in consumption more than ever before.
Meanwhile, some local talents are coming up with aspiring food delivery startups like "KhaiDai Today."
At the press conference, President of Bangladesh Association of Software and Information Services (BASIS) Syed Almas Kabir said, "Such an acquisition will help our e-commerce industry to get more foreign investment."
"In addition to welcoming foreign investment, we have to enrich our local resources," he said.
Talking about the food delivery market's prospect, Mohammad Rassel, founder of eFood, told The Business Standard that the number of orders is simply doubling every year and with efforts from the industry the growth rate will increase significantly in the coming years.
"Over 1 crore households of the country will be registered to order foods online before 2025 and that would increase the number of average daily orders to at least 15 lakh," he estimated.
"With a current average basket size of Tk300, the market is set to grow much bigger than it is currently," said Mohammad Rassel.