Interview, Fireside Chat
Niklas Östberg, Founder @ Delivery Hero: Competing with Uber and Doordash in a Capital Arms Race
- Quick commerce is projected to eventually constitute more than 50% of the total business, surpassing food delivery and expanding into health and beauty sectors.
- The company anticipates doubling down on logistics investments to enhance customer experience and improve economics, while the Glovo acquisition is forecast to grow larger than the rest of the business over the next 10 years.
- Glovo's margin is expected to reach 10% to 13% over time as pricing and efficiency improve, and profitability is anticipated for quick commerce in Colombia following a multi-year optimization period similar to logistics and DMART.
- Market expectations indicate that quick commerce will not be win-or-take-all, with multiple players anticipated to generate profits in markets like the UK and France if they maintain scale, service quality, and customer loyalty.
- Long-term value realization relies on maintaining growth trajectories without disruption, with the belief that 10 years of speed and focus on customer experience and unit economics will yield a product ten times better.
- Operational efficiency is expected to improve dramatically over the next decade via AI and Gen AI, with approximately 25% of deliveries potentially conducted by drones, although scaling will be limited by regulation and infrastructure.
- Robotics is forecast to cover a larger portion of the business than drones by operating in city centers and small or big cities, whereas drones face noise and regulatory challenges in urban areas.
- The competitive landscape expects that competitors relying on unsustainable discount strategies will lose customers, while the company's cohort performance is predicted to strengthen over time through adaptation.
- European companies face a disproportionate regulatory burden regarding GDPR and sustainability reporting compared to US and Chinese rivals, though reduced bureaucracy could enhance the region for startups.
- Strategic shifts include focusing on markets requiring significant capital for growth rather than those breaking even fastest, and the company views its home market exit as having strengthened international execution.
- Current stock valuation is characterized as undervalued relative to long-term potential, with market valuations typically looking one or two years forward rather than capturing future scale.
- The average company deploying AI, rather than just the builders, is predicted to be the largest beneficiary of the technology, driving efficiency without relying on cosmetic "AI stories."