For Kelu Liu, one of the challenges of moving from China to the UK was ordering Chinese food online. While there were several Chinese restaurants in his city, he found it nearly impossible to order from them. Their menus were in English and the translated names of the dishes had no meaning for him. Plus the dishes were all filtered for local palates.
The University of Nottingham student embarked on creating a food delivery platform geared towards Chinese students living abroad. He created an app that provided all the information to students like him, in a format they can use, which includes items that might be offered only in side menus to customers in Mandarin.
HungryPanda was born in 2017 to cater to this niche market. What began as a student project has quickly become the largest overseas Asian food delivery platform in 10 countries, including the
US, UK, and Australia, operating in over 80 cities.
Catering to a niche market
What sets HungryPanda apart from other take away companies is its focus in catering to a very niche market, Chinese residing abroad. “Kelu and his team chose this focus because we actually share the same cultural ethnic background. So not only do we know who the customers are, but we understand them. We see the pain points, and experience, and can experience that challenge,” explains Kitty Lu, the company’s director of public affairs.
“Back then, there were very limited Asian or Chinese restaurants on the main food delivery platforms,” she continues. “Even if they are on the platform, you can lose authenticity of the dishes because of the translation. For example if you have stir-fry on the menu, in Chinese there is a language barrier. So, it actually hampers the ability of Chinese customers to order online, and the language barrier also hinders the ability of Chinese restaurants to get on board with platforms.”
Seeing this gap, Liu sensed an opportunity. “This is our point of difference. We provide a Chinese language system and interface that’s more suitable to the Asian users,” says Lu. “Now, we also have a Korean language system, so we focused on a wider Asian cultural group.”
Lucky newcomers
This laser focus advantage helped HungryPanda reduce their costs and work on market research and product development. “Our model makes it easy for us to reproduce it in a new market,” says Lu. “If you launch a market in the US and France, it might be very different. But if you are serving the same Chinese cultural group in the US and France, their problems and preferences are more similar.” This efficient model allows HungryPanda to easily expand and set up in a new city in about two weeks.
From the University of Nottingham, HungryPanda expanded to Leicester, London, and several major cities in England, cities in Europe, the US, Australia and New Zealand. In 2020, it expanded to Canada, Singapore, Korea and Japan.
The HungryPanda model works by charging around 15% to 25% commission on every order delivered. Lu explains: “We try to keep it relatively low compared to competitors. We understand with Asian restaurants that the profit margin seems to be a little thinner.”
To date, HungryPanda has 3.5 million registered customers, 60,0000 merchants, and 40,000 riders. Considering many food delivery companies started in 2015 or even earlier, Lu points out: “We actually started quite late in 2017. Uber has probably already dominated most countries. So as a newcomer we are very lucky to have secured lots of very good investments.”
In December 2021, HungryPanda secured $130m funding bringing its total investment raised to $220m. “That was actually the largest investment in this particular food industry sector.” In January 2022, HungryPanda strengthened its presence in Asia Pacific acquiring local food delivery platform EASI in Australia and Buy@Home in New Zealand in January 2022.
Further disruption
While HungryPanda has successfully disrupted the food delivery market by catering to the niche Chinese overseas market, it continues to disrupt the food delivery world further by introducing PandaFresh and VouchersPanda.
PandaFresh is an instant grocery delivery business for Asian food items. It allows customers to order specialty Asian ingredients such as durian, fresh coconuts, sake, soy sauce, tofu, and many more. Unlike ordering from local supermarkets, which can take days to deliver, PandaFresh can deliver in 30 minutes to an hour in CBD locations. While other platforms partner with many existing grocery stores, PandaFresh has set up its own warehouse, stocking up on these ingredients.
Lu explains that using the traditional way of partnering with many grocery stores means you don’t control the stocks: “What we have done differently is set up our self-managed warehouse to improve the fulfillment capability. Precisely controlling, tracking, packing, and delivering the product, so we have control over every step of the process to ensure that supply is sufficient and service is up to our standards.”
She likens it to how Amazon functions. “The convenience is what we provide to our customers. It’s not only the product itself, but also the delivery service and the efficiency that comes with the whole experience. If we can’t control the stocks then that causes uncertainty. We want to make sure the whole customer experience is the best – you can get the things you want in a very short time frame.”
China has the most tools in terms of e-commerce. Taking the cue from China, VouchersPanda was born. It is a Groupon-style lifestyle vouchers business, building upon the existing food delivery business. “From what we can see, delivery is something people will always definitely need,” Lu says.
“Groceries are something people will always need, but when you have all these essentials embedded in our app, we can be a center of lifestyle, or different problem solvers,” she explains. “We can help you with pretty much everything you want in life. If you want take away, you order from HungryPanda. If you want to dine in we can provide you with discounts through VouchersPanda. Or if you want to go a hair salon, we can help you get a discount. We are an ultimate solution for you. This is the goal we are aiming for.”
As for the future, HungryPanda has its eyes set on geographical expansion to new markets. Lu says: “Our current focus is to shift from food to lifestyle.” By choosing to cater for and serve this niche market the possibilities appear to be endless for HungryPanda.
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