Why Developing Markets Are Beating Europe at Quick Commerce – Foodora's Chief International Officer

[00:00:00] How wow is it possible that I get something delivered like my toothpaste in 15 minutes time? Great wow experience, but the reality that the customers were something completely different. What they want is in fact to solve their daily or weekly or monthly shopping mission, having it done conveniently from the sofa, which is a thing for the customers much more relevant.

[00:00:20] Customers weren't really crying out for delivery in 10-15 minutes. Nobody was actually asking for that. It's interesting how it sort of landed in 30 minutes, one hour, two hours. Still getting that level of convenience and to kind of reduce the cognitive load of not having to think ahead and plan meals and know that actually I can order stuff and it will turn up in an hour.

[00:00:42] You're listening to Retail Disrupted, a podcast that explores the latest industry developments and the trends that will shape how we shop in the future. I'm your host, Natalie Berg.

[00:00:54] Hello and welcome to Retail Disrupted. Today we're going to hear from Giuseppe Randazzo, who is the Chief International Officer for Foodora, Foodpanda and Yemexepti. He can tell me in a second if I pronounce that correctly. Hopefully I have.

[00:01:19] Giuseppe previously oversaw international markets and performance strategy across more than 70 delivery hero markets globally. And he has over 15 years of experience across strategy, operations and digital businesses. Giuseppe, welcome to the show. Thanks a lot, Natalie. Thank you for having me and hi everyone that will be listening. No, thank you for being here. It's always fun to talk about quick commerce. There's so much happening in this area.

[00:01:47] But before we get into the big topic, for anybody outside of Europe tuning in today, can you just tell us a little bit more about Foodora and what it is that makes you different from some of the other delivery platforms out there? Thank you. Great question. Look, Foodora in a nutshell, in one sentence, how we define it and how we like to look at it, is what we want to be the most loved local marketplace for our customers.

[00:02:15] So in a nutshell, we want Foodora to become the place where customers go to, to solve their everyday needs when it comes to food, but not only when it comes to groceries, when it comes to other verticals that may be adjacent. And as part of that mission, we also want to empower the local ecosystem in the cities that we operate in, and the small medium enterprises to actually grow with us and have access to more customers.

[00:02:44] And as we do that, we also want to provide job opportunities for our riders. So we want to connect the network of our cities, and we want to provide the space where we want to thrive. Yeah, and I guess I should say that you are part of Delivery Hero, which trades in around 65 countries across four continents. I think your mission statement is super clear. I love it, which is to deliver anything fast, right?

[00:03:12] It's super clear what you guys are doing, and obviously moving more into non-food. And we'll come back to that kind of category expansion and the strategy around becoming this everyday app. But firstly, let's just stick to markets for now. So, you know, you have this really interesting vantage point by being present in so many markets. And presumably those markets are at very different stages when it comes to quick commerce. And I don't know, maybe some have even leapfrogged traditional e-commerce.

[00:03:43] For the retailers that are tuning in, where should they be looking to for inspiration? Like which markets are doing quick commerce really well today? This is a beautiful question. Honestly, so my experience, I have the luck to cover many, many markets. And I can say that the level of maturity and penetration in the space when it comes to quick commerce.

[00:04:04] And here, of course, when I refer to quick commerce, I refer to anything that is even beyond food is vastly different depending in the region, depending the countries you go in. You might also be very surprised that, in fact, the standard patterns that we would expect are not normally respected. If you go to Europe and then you jump from Europe or maybe to other development markets, for example, go to Bangladesh, go to Pakistan,

[00:04:30] you will discover that, in fact, places like Bangladesh, Pakistan are even more advanced when it comes to quick commerce penetration compared to Northern Europe. And this is incredibly interesting. And this is because in certain parts of the world, we have practically speaking with our platform, maybe leapfrogged from one stage of the retail,

[00:04:59] that is the organized retail that normally comes after the, let's say, wet market and unorganized retail. We leapfrogged starting directly to go from that to the quick commerce and to the online retail and online grocery, you know, like eliminated one step of the chain. And instead in maybe in Europe, we are still like on the previous stage, still retail players are more focused on developing their offline footprint.

[00:05:29] And maybe in some cases also developing their own online channels and platforms are adding on top of that. And there is that also sometimes healthy tension or tension between, you know, what's the strategy for a retailer? Should I, you know, develop my online channel or instead should I partner with the platform? And, you know, what I can bring from other markets is like the realization that, you know, in fact, markets that are both advanced or earlier stages,

[00:05:58] in fact, are very much more advanced in certain cases compared to mature markets in maybe Europe. Yeah, that's a really interesting point. And I guess it kind of explains why some of the European retailers, not that they've been slow to embrace it. I think it's just a case of, as you say, there's so many choices. There's so much channel complexity because they do need to think about quick commerce. They need to think about TikTok. They need to think about chat GPT. So there's a lot of sort of moving parts.

[00:06:28] And it's interesting to get your take on where we can look to for inspiration. I didn't realize a couple of the markets that you mentioned were so advanced. So super interesting. I guess it all comes back to the customer, though. So maybe that's a good starting point. And I'd love to know what you're seeing from your customers, like when they come to your platform. Obviously, they want convenience. But what else are they looking for? Yeah, I would say normally two things.

[00:06:56] Definitely convenience is one thing. I mean, our platform are born for convenience, right? Effectively and simplify your life. And as part of our target customer, of course, there will be the busy professional or the time-strapped families, everyone that you know want to make their life easier. Convenience is just one portion of it.

[00:07:22] Then one other thing that our customers are looking like in many cases is also choice and affordability. Of course, affordability means that, you know, while you seek that convenience, you need to provide that for that fair price and make that convenience worth having and tapping into.

[00:07:44] And because it's very true that all our customers and many of our customers are not kind of convenience seekers at all costs. In reality, affordability and having an experience that has a fair price point in order to tap into is extremely relevant. So what they look for is a service that has kind of not excessive fee attached to it and comes with affordable prices.

[00:08:11] And affordable prices, they come in the form of the right pricing of the meal that they found on the restaurant, comes in the form of strong deals that they can find on the platform when it comes to ordering restaurants. It comes in the form of having retail prices available when they order quick commerce and groceries in their favorite local shop that they find on the platform and so on. So this is the piece that comes to affordability.

[00:08:38] Then when it comes to choice, instead, again, while I want, you know, my convenience of the groceries delivered at home or I want the convenience of, you know, my meal delivered in the office or at home for dinner, then I want to have the right one, the right food, the right local shop partner that I want delivered.

[00:09:01] And so here it comes, the expertise of the platform on what are the, you know, restaurants that you need to have on the platform. So convenience is obviously the first thing that comes to mind. But I think what you've just said is that you operationally still need to hit all the basics around choice and affordability. Like all of those things need to be in place in order to be successful. Yes, absolutely. And I didn't even mention one other piece of like, of course, the one engine factor being the service as well.

[00:09:29] You know, you want to have also your service delivered from the right vendor, from the right restaurant and the right price point. You also want to have it delivered fast and on time versus what you had expected. And so this is another, if you want hygiene factor that is nowadays not even anymore. And hygiene factor is a competing advantage, actually. If you manage to optimize your network in a way that you deliver faster, you stick to your promise. That's like what the customers are looking for.

[00:09:59] Yeah, and I imagine that if you don't do that, because obviously mistakes do happen. But in that setting, in that kind of mission, shopping mission, where a customer is looking for convenience, maybe they're paying a little bit more. And I know affordability, as you just said, is a factor. But maybe they're paying a little bit more for that convenience. So I feel that, and correct me if I'm wrong here, but I feel that expectations are even higher. So you have to deliver a very good experience. Yeah, absolutely.

[00:10:24] And by the way, that is an interesting angle, because in fact, then, depending then on the customer profiles, that expectation also can be paid as a premium. And to give you an example, we do have, like, products that allow our customers to order with the priority delivery or maybe with the saver delivery. So they can pay slightly more or slightly less in order to have an accelerated service level.

[00:10:52] So this way, we can cater to the customers that want the maximum level of convenience or the ones that want the maximum level of affordability. And we can cater for all of those. Yeah, yeah. I guess, I mean, as consumers, we have that choice when it comes to Uber. You know, do you want to pay that little bit of a premium for it to arrive in two minutes rather than waiting five? You know, so I think as customers, we are living in this era of everything is on demand, everything's on tap.

[00:11:17] And so I think that just raises the bar for retailers and businesses across the board. So I'd like to shift gears a little bit and just touch on something that you just mentioned, which is around choice. Because there is an interesting shift happening right now where you have traditional retail marketplaces moving into grocery delivery, especially on demand. And then you have the apps that started out with restaurant delivery moving into grocery and now even non-food.

[00:11:46] So I imagine that way is probably less of a sort of steep learning curve, maybe a little bit easier. But tell us a little bit more about what you're doing in terms of category expansion and the thinking behind the shift in strategy. Yeah, that's a great question. So, Luca, I maybe start then with the view of what we do as a platform, right? And then maybe later we can, if you want, comment briefly on maybe the retailer. But like from our side, the strategy is pretty clear.

[00:12:15] And I start with the vision first or what we believe is the potential or the ambition. We do strongly believe that the quick commerce, meaning online quick delivered groceries and other verticals can be easily as big as the food business. Yeah. And this is because, simply speaking, there is a market for food, but there is a market for online groceries.

[00:12:46] And convenience is a secular trend that will just remain with us. So that's one piece. We are at the, if you want, not even more at the early stage of it, but the progression from our core to getting then into the quick commerce space, of course, comes from like moving from our core to the more immediate adjacencies and then moving from there, expanding to what makes sense is synergic to our value proposition.

[00:13:12] So, of course, if you have a platform that has originally delivered food, the next immediate adjacency without even thinking about it is, of course, grocery delivery. Right. So that's kind of the first step when it comes to expansion across all the verticals.

[00:13:31] The first thing that comes after food will be clearly groceries, which we do in different, by the way, type of fulfillment models, because we do operate both our own fulfillment centers. Our, we call them DMARTs. And we do deliver directly.

[00:13:51] We carry the inventory and we do take responsibility for the delivery of the service, the inventory, the assortment, the pricing, and everything that comes to it, fully verticalized. Then we do the same with key partners that can provide strong assortment. They have very high brand recognition and that our consumer can immediately like recognize them to.

[00:14:16] Because if you go, I don't know, to an ocean or like a coop or like other more e-kinds, we then, you know, then, of course, as you kind of start to peel the onion, onion, fart, then you go into the next steps. What are the next steps? Of course, the moment you have unlocked groceries, then you go to the immediate next things. What are the next things? Of course, then you will look at health and beauty. Here we look at pharma. Here we look at flowers.

[00:14:46] Here we look at pets. Pets, for example, is a category that is growing very nicely. Like people love like ordering their pets items on platforms because sometimes are bulky and, you know, maybe you want to save that time to go to the pet shop and you rather want to walk your pet.

[00:15:04] And so, you know, it's almost intuitive, like how you go from the food to the immediate adjacencies that are around it. And have the shopping missions changed much over the past few years? Because obviously we had COVID, which was a big catalyst for getting consumers using these kinds of quick commerce platforms. But are you finding any shifts in consumer behavior? Tremendously, yes.

[00:15:33] This is a fantastic question, Natalie. I think it changed entirely, I would say. At the beginning, I would say during and right after COVID, probably quick commerce was that cool new thing that will deliver you something, like some items out of a relatively small assortment of items delivered to your home in like 20 minutes.

[00:15:58] And with that kind of wow factor that you will think like, oh, wow, is it possible that I get something delivered like to my door after the order, like in, you know, my toothpaste in 15 minutes time. Great wow experience. But the reality, what we see today is that the customers were something completely different. That type of, you know, if you want hype or wow factor having something delivered in 15 minutes and not what actually the everyday customers want to.

[00:16:26] What they want is in fact to solve their daily or weekly or monthly shopping mission. That means actually migrating all their maybe one hour shopping mission at the supermarket, actually having done, having it done conveniently from the sofa, choosing the item that you want and having them delivered, which is a thing for the customers much more relevant than if you want. You have forgot your toothpaste and you need to have it fast.

[00:16:55] It's much more relevant because it saves much more of your time. And of course, for us as platform is what we strive to do because it's ultimately a much healthier business as well. And is what we believe will unlock for us the opportunity of a big, big opportunity ultimately.

[00:17:20] Because quick immediate needs are like a part of the market, but definitely the market is your daily, your weekly, your monthly shopping mission. Yeah, it's so interesting to hear your views because that sort of clocks with what I've been seeing globally as an analyst. That, yeah, it's that whole magical experience of getting toothpaste delivered in 15 minutes just because you could.

[00:17:46] I mean, that sort of unlocked this level of immediacy that we just never had before. And I think once a customer has something, it's really hard to take it away, right? So I think, but I also think you're right that we know customers weren't really crying out for delivery in 10, 15 minutes. Nobody was actually asking for that. And of course, you know, it has to be financially viable, right?

[00:18:11] So I think it's interesting how it sort of landed in kind of the 30, one hour, 30 minutes, one hour, two hours, in terms of still getting that level of convenience. And to kind of reduce the cognitive load of not having to think ahead and plan meals and know that actually I can order stuff and it will turn up in an hour. So I think it's just been such a fascinating shift. So let's talk a little bit more about technology.

[00:18:38] I know a lot of delivery apps tend to think of themselves as tech companies that do delivery rather than the other way around. I'd love to know how you guys are using technology. So if we look at robots, for example, I actually had Ati Heinle, the co-founder of Starship, who I know you guys have partnered with, former co-founder of Skype as well. He came on the podcast last year and so got to learn all about robot delivery and how it's really kind of changing the game in Europe.

[00:19:06] I'd love to know what you guys are doing and maybe anything you can share about how it's working and how consumers are responding. Oh, yeah, that's super exciting indeed. Yes, we partner with Starship Technologies indeed. We've been working with them across the Nordics.

[00:19:25] We have an ongoing and successful program, robot delivery that we operate in Sweden. And we started that at the beginning of last year, beginning of 2025. And also we did some testing in NOLs as well. And this is extremely nice. It's perfectly integrated in our delivery ecosystem.

[00:19:52] You can get your items delivered. And with the robot delivery is an option that you can select at the checkout. It's free for the customers to choose. It's an experience that you can deliberately choose. And it's been very well received. And we had quite some substantial work that we've done together with the Starship team.

[00:20:22] And very good reception among the customers. And that is also work we've done. Yeah, they're very cute as well, aren't they? It's definitely very cute. It's definitely very cute. And then we are doing even more. Like, we have also done some work with Starship as well in Czechia recently. In fact, we made Czechia the first delivery platform in the CEE region to actually launch

[00:20:52] autonomous delivery. And to date, I think our robots in Czechia have run more or less 1,500 kilometers. Something of that sort. So quite a lot of miles done. Yeah, amazing. Amazing. One other thing I wanted to ask you just on the topic of tech, and then we're going to move on to platform stickiness ecosystem. We've got a few things to cover there.

[00:21:18] But first, I just want to ask you about this sort of shift from reactive to anticipatory commerce. So we know that search has been disrupted. And I guess my question to you is, like, to what extent in the future will shoppers be expecting you to know what they want before they do? If we take our user engagement with the platform,

[00:21:42] we can clearly segment where are the channels, where kind of the others come from. One is the traditional search bar, right? This is a little bit of the past and the backbone. But the reality already, and not now, but already in the last few years, we had a big part of the engagement with our user interfacing,

[00:22:08] with our app coming from non-search type of discovery and ordering. Yeah. So here what I'm talking about specifically is with the basic use cases, I'm talking about swim lanes or discovery assets that are not necessarily prompting restaurants to the customer as a result of a search, but just as a result of what we believe that customers

[00:22:36] most likely will want to order. Of course, the moment you have the history of the customers, you can predict even better, right? So, you know, the order history, then you will tailor the experience and the recommendation with, you know, what they like to eat. And normally, for example, your past orders swim lane is one of the ones that we find our

[00:23:01] customers liking them more because also sometimes customers are very, let's say, habitual and they always go to their same, to their similar, to their typical restaurants. So that's one other layer. And then the best, the new things that are coming are instead like the algorithms and the machine

[00:23:22] learning and the elements to these discovery and search experiences that instead go even beyond what is the interaction that the customers had already with the app and what they've ordered and instead look at other data points within the app. For example, like nowadays, what we can do is we know how the customers have actually interacted

[00:23:49] with the app, what they have even searched and looked at. And based on that, we can tailor the recommendation. We even without having the customer places the single order yet, for example, or then even more so when we, for example, use similar customers to create lookalike audiences. And so we can break the typical barrier of what we should show to a new customer because a new customer

[00:24:18] has no order history, right? So how we get to know this customer, we can create similar customers and profiles and most likely we will be maybe guessing better than yesterday what maybe Natalie wants to order for a first order on Foodora. And then maybe going to the very last of the evolution of these and here when it comes to more to what we are working on now and what will be the future.

[00:24:43] Here we look more, of course, at let's say full on AI enabled search and discovery experiences, right? Because as you can imagine, how it's going to work in the immediate future is going to be that if you want to order something, you want to order your food, you want to order your groceries, you're going to interact with your agent on Foodora and you're going to ask, you know, I'm craving for sushi tonight, you know, what I can get.

[00:25:13] And then you will have that very nice kind of engagement with the agent that we recommend you the best option around. And that is what we're working on. Yeah, it's definitely the way that things are moving. So super, super interesting. So just a couple final questions for you. I'd love to hear a little bit more about some of your partnerships. I know you've partnered with Klarna and Spotify and others as well.

[00:25:40] And I just I'd love to understand the strategy behind this and whether the goal is to become a platform that a platform that people live inside rather than just sort of order from. First of all, we are a strong believer on the fact that we need to be the best one of doing something and something that is very, let's say, focused on a perimeter that we can own and be the best on,

[00:26:10] which in this case is delivering in the best way possible restaurant and groceries and indeed other additions, very additions, vertical, right? So we will not venture in doing other things that we don't believe we have the right to win or the right to play even. But what we believe strongly on is that there is a lot of value for the customers in having,

[00:26:40] let's say, ecosystem-enabled benefits and experiences. And so what we try and strive to do with the partnership that we do and we carefully cherry-pick is to create that sort of ecosystem value for our customers. So you get, if you want, the one plus one equals three because like working together with some partners,

[00:27:05] we deliver to our customers something more that they would get if they would be just on Foodora and just maybe on Klarna or on Void. A lot of it we are doing definitely also leveraging our subscription program as a platform for that because, of course, many of these experiences and these services come nowadays within the subscription economy, if you want.

[00:27:32] And so what we try to do is to center and embed this partnership as part of our subscription program. Our program is called Foodora Pro and we try to leverage that a lot to embed the search partnerships. Yeah, fantastic. And I guess to your point, it does need to be more than a transaction, right?

[00:27:59] You want to develop that emotional loyalty with the customer and give them something more than they can. You want to be more than just a place where they order stuff, I guess is the simplest way to put it. But so very briefly, Giuseppe, I know we've covered so much ground, but I'd love to just briefly get your thoughts on the future of quick commerce. And if we look, say, four to five years down the road, do you think there'll be a point where we stop calling it quick commerce and it just becomes commerce?

[00:28:28] Yeah, probably. Yes. I mean, if we go back to maybe where somehow almost we started our discussion, like, yeah, the quick part of the question is a little bit nowadays. If you want, on one hand, less relevant and on the other hand, more given for granted. So definitely, I think if we fast forward like five to 10 years, that might be the case.

[00:28:58] The 20 minutes delivery, of course, is not going to be a thing. It's going to be one of the use cases. And then other use case being you get your delivery the next day or you schedule it. And so definitely quick commerce would not apply anymore. Now, if you also look like down the line, what I do see happening within the, you know,

[00:29:21] broader quick commerce landscape, I see, of course, more and more vertical becoming available for users to order. We do see this happening, of course, as being like a trend over the last, you know, five years, like since COVID or even earlier, that's not the news and will become just a routine.

[00:29:44] And what I do see is a lot more deeper and stronger partnerships between platform like us, like Fedora to with local strong offline retailers. The boundaries will blurry and a lot and the go-to-market model will change.

[00:30:14] One thing that I want to mention, as an example, what I mean is, for example, what we have recently done with our partner, Dilla in Austria. Effectively, we have created a very strong partnership for which effectively we became the only online go-to-market for Billa. And so this, I think, gives us a window on how the future is looking like, right?

[00:30:41] So Billa has entrusted strategically, Foodora, to be the only online presence of Billa. And we do operate effectively Billa dark stores from which we pick and we deliver.

[00:31:02] So for me, like one key takeaway out of the Billa experience is that I think that gives us really the view of what the future holds, right?

[00:31:16] Because I believe what it clearly shows is how the boundaries between the traditional retail offline and the platform space and the quick commerce space will fade and will blurry. And how the traditional go-to-market channels will look like very different from how we look at them today, right?

[00:31:41] So you will have platforms and traditional retailers working together on a new format of fulfillment that today do not exist. And there would not be any more the platform delivering from the stores, maybe, but there would be the platform delivering on behalf of the stores from dedicated stores.

[00:32:09] And there would not be any more maybe the retailers operating their own online channels because the level of synergy with platform would be so strong that that maybe would not become needed anymore in the future. Yeah, exciting times ahead. Giuseppe, it's been so great to have you on the podcast. Thanks again for joining us today. Thank you for listening to Retail Disrupted.

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