Uber Eats to compete with Mr. D in the South African food market

on Jan 4, 2020
Updated: Mar 11, 2020
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  • Uber Eats is up against Mr. D in the South African food delivery market.
  • South African food delivery industry is likely to hit 17.6 billion rands by 2023.
  • Uber Eats helped boost Badela's restaurant's sales by 15% to 20%.
  • Uber can use apps driven data to gauge popular restaurants and top food priorities.

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Dumile Badela’s restaurant located near Nelson Mandela’s former residence in the Soweto township of South Africa is at its peak in terms of sales, thanks to orders that keep trickling through Uber Eats.

Uber Eats is currently trying to dominate the food delivery market in South Africa with the help of its huge number of drivers. Statista states that South African online food delivery industry has grown significantly and is expected to hit 17.6 billion rands by the year 2023.

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Uber Eats Sees Middle-Class Families As Its Primary Customers

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After targeting top restaurants in the country during a recession, Uber Eats has decided to recover from that mistake now by focusing on the local cuisines. Launching in Soweto in May, the app works with 20 or so partners, and is consistently growing its menu and delivering dishes such as caterpillars, stewed tripe and, cow heels. Uber Eats’ general manager, Dave Kitley also highlighted that the company is focused at catering to the middle-class families which it sees as its primary customers. 

According to Badela, Uber has boosted the restaurant’s sales by 15 to 20 percent. Owing to the massive opportunity, however, Badela is targeting as much as 50% increase in sales. The analysts expect it to be a win-win partnership. Contributing to 10% of Uber’s quarterly revenue, Uber Eats can help the company pull out of its $1.16 billion loss in Q3.

Uber Can Use Apps Driven Data To Dominate The Market

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Thanks to Uber’s ride-hailing service that has already dominated in the South African market, Uber has access to data that provides insights into popular restaurants and gauges the top food priorities via its applications. With such data, the analysts added, Uber may be able to get an edge in the market that’ll help it compete with its staunch rivals in the country such as Mr. D.

Established in 1990s, Mr. D is an established delivery service that currently rules the South African market. In the past 12 months alone, it has generated a revenue of 1.5 billion rands from food orders. A new addition to the competition in the upcoming months is likely to be Bolt; a new food delivery service to be launched in 2020.

While Uber has recently faced troubles with regulatory bodies in different regions, it continues to expand its business in others. Currently trading around $32 per share, the stock aims at recovering its loss from a record high of over $45 in July 2019.

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