Fintech & Ecommerce

DoorDash’s Grocery Business Grows to Record-High 532 Million Orders

DoorDash fixed record volumes of orders against the background of the rapid expansion of its grocery business, which has resulted in the growth of sales figures.

DoorDash’s Grocery Business Grows to Record-High 532 Million Orders

This company, whose scale of activity allows it to be defined as a giant in the field of food delivery, in the income statement for the second quarter of 2023, published last Wednesday, August 2, reported that on an annualized basis, the total volume of orders for the mentioned period showed an increase of 25%, reaching 532 million.

Also, in the period from April to June, the total cost of orders on the firm’s trading platform increased by 33%. In this case, a record cost figure of $2.1 billion was recorded.

The positive results for the second quarter are partly due to the expansion of the aggregator’s verticals, which are not related to restaurants.

DoorDash CEO Tony Xu, during a telephone conversation with analysts, said that over the past two and a half years his company has been able to create a multibillion-dollar grocery business without having preliminary projects in this industry and acting from the initial stage, which does not provide for any earliest developments. According to him, there are currently more stores on the firm’s platform in North America that are not connected to restaurants than on any other platform. He also noted that the dynamic of business growth is being recorded, and said that the company is significantly increasing its share in all categories, paying special attention to grocery stores.

Industry studies indicate that currently a small share of online orders is recorded in the structure of food sales, but at the same time, it contains forecasts about the trend of increasing the level of consumer activity in the virtual space, which has signs of stability and regularity. In the USA, 12% of transactions with products in this category are made online. At the same time, 32% of consumers declare their intention to increase the level of their purchasing activity in the digital dimension next year.

DoorDash continues to stimulate the positive dynamics of the development of its core business of delivering food from restaurants. In its earnings report, the aggregator believes that it has acquired a stake in restaurants, fast food stores, and grocery stores in the United States, based on third-party data. This formulation, which contains not a statement, but an assumption, may mean that the firm implies the actual state of affairs without its formal legal designation. Also in the report, the company states that it has a long way to go.

Tony Xu says that the firm’s restaurant business has certain achievements, but its share in the US restaurant industry in terms of sales volumes is a single-digit percentage. Based on this, he concludes that the company has to solve many development tasks.

In June, a special survey was conducted in the United States, which revealed that out of almost 2,000 respondents, less than 5% had placed their last order at a restaurant through an online aggregator. Also, only about 40% of the participants in this survey reported that they had used virtual platforms for these purposes over the past six months.

Among the users of aggregators, the share of those who interact with DoorDash prevails. During the mentioned survey, 77% of respondents reported that they used the services of a food delivery service from San Francisco. Also, Uber Eats and Grubhub interacted with about 50% and 35% of respondents respectively. A year earlier, the share of DoorDash in the structure of user preferences was equal to 70%.

This quarter, the San Francisco-based company announced the possibility of hourly pay for its gig worker drivers. The firm also announced the addition of the ability to pay for groceries using the Supplemental Nutrition Assistance Program (SNAP), and Electronic Benefits Transfer (EBT) and started a partnership with Amazon Canada to offer a free annual DashPass subscription to Prime subscription holders.

As we have reported earlier, DoorDash Reportedly Tests AI Chatbot.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.