We're going to look how can you scale beyond food with a super app. Turning a food delivery platform into a super app. That's what we're going to look at because food delivery giants are really becoming daily life platforms. These super apps that everybody's talking about because while vertical we're going to find out why is vertical integration key to margin growth and how AI cucumbers and a better finance are really shaping the next billion user apps and of course how can you scale across 70 plus countries that's a question that of course our next speaker can answer and I'm really excited to see him once again I was just in Munich at bits and pretzels, another startup conference in Europe and it was absolutely fascinating that he was here. Now he's here in Dubai because he's not that often on stages. So therefore, it's also a huge honor to have him with us, the CEO of Delivery Hero, who co-founded Delivery Hero and turned it and scaled it from a startup into a 12.8 billion business with 30 major acquisitions. and he describes Delivery Hero as not just a food player but as a techpowered infrastructure platform for commerce logistics and daily essentials and he's going to be interviewed with no one else by the founding editor and chief of Wired UK. He's authored a best-selling book which is called No BS Innovation and spoken about at over 700 over 700 events and has also invested in more than 180 startups including eight unicorns. So please welcome with me now David Rowan and Niklas Östberg. Welcome. Great to have you.
Anybody hungry? Do you want a schwarma, a biryani? Yes. Or maybe you need some deodorant or maybe some toothpaste or maybe your weekly shop. This man can arrange it. He's got a couple of million riders in 70 countries around the world. and 50,000 employees making sure everything works. He doesn't just deliver food. He delivers whatever you want. Your weekly groceries, the item that you need in the next 10, 15 minutes. Delivery Hero is where it started. But now the company that Niklas runs is everywhere. Talabat which made its famous IPO last year is part of the group but also companies like Gloidosa Food Panda. But Delivery Hero is moving to the next level beyond just food to creating a single app where magic happens. Niklas Östberg, the co-founder and CEO of Delivery Hero. Welcome. Tell us what a super app is. What's the difference between where you started helping us get our quick dinner and where you're going?
Oh, it started very nimble, I know very small but still very passionate about every single order in the beginning. That was all the way back to 2008. There were no laptops, there were no internet Wi-Fi, all of that, and we were celebrating every single order and we were only a marketplace where restaurants were visible to consumers. Over time we built out the logistic part. We realized that customers also want to have groceries. We also tried to perfect the experience by building our own kitchens, solve payment infrastructure, trying to solve for retail experience and so on. We have built up from being just a food marketplace to being today more of a super app of anything you want, and yeah, that's where we are.
And you have previously said that the opportunity for the super app with quick commerce with payment wallets with groceries is more than €200 billion. So I guess you are on the early stages of getting there. But how do you convert the user from being somebody who wants a quick snack to somebody who embeds Delivery Hero in their life?
Well, you have to deliver a good experience. So that's where it starts. And I think we built a very good food delivery experience first and people trusted us for doing that. And once we start with groceries and retail and gifting and so on, they also trusted us there and they gave it a try. And I think the only way we can do it successfully is that we wow the customers every time. And that's why we build up our own stores, warehouses, such that we can deliver, I don't know, hundred thousands of SKUs in a matter of minutes. And that's why customers trust us.
How do you think about the technology aspect of the platform? Because you call yourself a tech platform that enables delivery. Where does AI, where does the tech operation fit into the thinking around the business?
Give some examples of specific ways you're using AI to improve the customer experience.
Well, so one is the user interface. So we have tried different ways of making contextual search meaning that you search 'I don't want to have peanuts' or 'I want to eat something that is spicy' and so on. We even built an example with Talabat where with shopping where you said 'I want to cook a tiramisu' or 'I want to do a chicken tikka masala, what do I need to order?' and it already adds to basket. So we have done different experiments how we can actually enable the consumer to get more. But again, I think the biggest user value that we're building is to enable low cost and a high degree of items available and that we know what you want as a customer. And that sounds very easy, but it also means that we have to deal with every single second that we can save is millions of savings that we can pass on to consumers. Enabling someone to order a food item for, let's say, five, six, seven euros and still get it delivered and making it hot requires a lot of technology to know exactly where a rider needs to be at what point in time and how we can stack it with other items. Yeah, if you want to have a grocery item, we need to make sure that we get the right grocery items into the right location for you to order and again at a low cost meaning that we have to have a content number of items per square meter. Yeah. So, so there are so many examples where technology means a difference of consumers in order driving cost speed and availability of items.
How can you use this data whilst respecting my privacy to get me more engaged, get me buying more, get me engaging for longer on the super app?
Yeah, we want to show what's relevant for you. So if someone has a very good taste, you don't mind if it cost a little bit more, then we'll show restaurants that have the best quality close to you, restaurants that we think that you like or products that we think that you want. If I have a taste, I just want something cheap and but fill my stomach, I will be able to find that too. I will find the best deals. I'll find the low cost items. I'll find safer options for me because that might be what I look for. So a super app and making it, I don't know, the preference of it needs to be visible in the app when you get there that you need to see something that is attractive for you which might be different for me and that's a challenge.
You're a global company but very active in the region here. People know Talabat well. How different is the business in the GCC region in the UAE and how has customer behavior varied compared within Europe within Asia?
So, Middle East is a fantastic market for us and there is a clear difference between markets. I think Middle East is very technology savvy. It values service. And our core belief was that we have to always deliver the best customer experience and the best customer experience you get when local teams work in the market. So that's why we build a lot of local technology, local teams, local ownership, accountability. And I think that's what we've done so great in Middle East that you have Talabat is 100% focused on the Middle Eastern customer and a team in Latin America will be 100% focused on that Latin American customer which might be different but I think this local approach and hiring strong engineering and talent pools locally makes a huge difference. It costs more but it makes a difference to consumers.
Later on we have Tomaso here who's running Talabat. He can speak more about Talabat in an hour. And you started locally in Sweden delivering online pizzas. And then Delivery Hero started with you involved in 2011. So it's 14 years on. And it's a big company. Now your first half of the year results recently €25 billion in GMV for the first half of the year. 7 billion euros in revenue now in an operating profit more than €400 million incidentally and half of that GMV is from multi-app users people not just ordering food. How do you stay nimble, agile like a startup when you have a couple of million riders and 50,000 staff to look after?
Yeah, I think it comes down again to the structure and the both the culture and the structure we built. We have a culture where the only thing we care for is the consumer. Every action we do should preference for the consumer and that goes through the whole organization in every market. And secondly, managing that complexity is to have these local strong teams focusing on their region and their needs. And we started off also only handling one thing which was food. And we only moved to become more of a super app when we really mastered the food delivery side. And once we mastered that, we went to groceries. And then we really tried to master the groceries by building our own stores, own infrastructures. And now we're expanding to more verticals to be more of a super app because that's what our customers want. But the complexity is managed a lot from a local level where they know the consumers and that's what's very different between us and Uber and some of our American peers is that we are truly local.
