Foodpanda Pakistan Reports $100M Investment, Eyes Expansion Despite Challenges
LAHORE – Food delivery giant foodpanda Pakistan has invested $100 million over the past decade, including €2.3 million in kitchen infrastructure, according to an Economic Impact Assessment by the Lahore University of Management Sciences. The company, a subsidiary of Germany’s Delivery Hero, is now focused on doubling its business within three years through strategic expansion of its kitchen network, grocery marts - both owned and franchised – and its “shops” platform.
entering Pakistan in 2016, foodpanda currently operates in 35 cities for food deliveries and 12 for groceries, utilizing seven dark stores with product assortments tailored to local preferences. In fiscal year 2024,the company contributed Rs9.76 billion in tax revenue.
The company’s operations are supported by a network of 50,000 registered riders, with 17,000-18,000 active daily. Full-time riders earn between Rs48,000-50,000 per month,though they are responsible for fuel and maintenance costs,with compensation rates adjusted to reflect fuel price fluctuations.
Foodpanda is also actively working to increase female participation, with a growing number of women becoming home-based entrepreneurs on the platform. The impact report highlights over 7,000 home chefs, 75% of whom are women, earning an average of Rs120,000 per month, with approximately half being first-time earners. While female riders remain a small percentage of the overall rider base, examples exist of women commuting significant distances to participate, such as a rider traveling daily from Sheikhupura to Lahore.
The company operates on an average commission of 25%, varying with order volume, with restaurants also subject to sales tax above a certain revenue threshold. Currently, only 15-20% of restaurants on the platform are GST-registered. Provincial governments have reduced service tax rates for home chefs to 8% in Sindh and 5% in Punjab. Despite these reductions, commissions and taxes collectively consume around 30% of revenue, leaving approximately 40% for expenses and profit after accounting for 30% food costs.
Foodpanda faced significant disruption in May 2023 when a nearly three-day mobile internet suspension resulted in a 70% loss of gross merchandise value.The company adapted by sharing Wi-Fi passwords from partner restaurants with riders in major cities, though navigation proved challenging without Google Maps.
