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Deliveroo’s Perth expansion has opened up doors in other states, says country manager
Tue 13 September 2016 - 2:00 pmGrowing | Small Business | Strategy
By expanding its on-demand food delivery service into Perth, Deliveroo has created new opportunities for growth in the other Australian capitals where it operates, according to country manager, Levi Aron.
Founded in 2013 by William Shu and Greg Orlowski, the London-based company hit it’s 100th city milestone, last Tuesday, when it launched in Perth. Deliveroo’s expansion into its fourth Australian capital was marked with the rollout of the company’s revamped logo, look and rider equipment globally.
Aron spoke to Dynamic Business about the strategic value of expanding Deliveroo into Perth and the company’s growth strategy for Australia, moving forward.
Why was Perth selected as the fourth Australian marker?
“We launched in Sydney and Melbourne, last November, and expanded into Brisbane in April. It was important to firmly establish ourselves in these cities initially to ensure we could localise Deliveroo’s offering. That meant building strong teams, partnering with the right businesses and making sure the business was sustainable. There are a couple of reasons why we launched in Perth, this month, ahead of launching in another capital like, say, Adelaide.
“Firstly, while there have been issues in the local economy since the mining boom, there’s a great foodie culture in Perth and a supply of great restaurants. It doesn’t have the population size of Melbourne or Sydney, but per capita we’re expecting to see strong growth in Perth, especially with the type of restaurants we’ve targeted.
“Secondly, the fact that Perth is two hours behind Sydney and Melbourne provided us with an opportunity. We provide support for our restaurants, riders and customers in our existing markets from our Melbourne office. Our customer service team had been working until 11pm but now, to cater for the time difference in Perth, we have people finishing at 12, 1 or 1.30 in the morning. We know that many of our restaurants in Sydney and Melbourne are open late at nights, so by moving into Perth, that has enabled us to commence doing late night deliveries in these cities.”
What is Deliveroo’s approach to competition in Perth?
“As with Sydney, Melbourne and Brisbane, we’re predominantly working with premium and gourmet food restaurants that locals recognise but haven’t delivered previously. It’s about creating a network of restaurants that consumers recognise, want and associate with Deliveroo.
“The restaurants we partner with, we work with them on packaging as well as digital and offline marketing to help them break into the delivery space. We also provide them with account support. This is how we’ve built a strong network in Sydney, Melbourne and Brisbane, and it’s our approach in Perth.”
Beyond Perth, what are the plans for Australia?
“We’re bedding down the cities we currently service but also looking to expand our coverage in Australia and make our existing network more accessible. We’ll be launching in more cities on the coming months and we recently expanded into alcohol delivery.
“With RooBox, we’re introducing key partners into areas where there is a limited restaurant supply but great potential and establishing a network of kitchens dedicated to delivery. We’re doing this by working with council and taking out leases on properties or introducing containerised kitchens. This initiative is addressing a big challenge for restaurants, which is expanding their brand into new areas – the cost of fitting out a new establishment alone can reach into the hundreds of thousands of dollars. We’re introducing partners into new areas for periods of six to twelve months and covering the setup costs. We view it as R&D for the partners we bring on board. It’s a way for them to test a new area without realising, months down the line, they don’t have much traction. We’re covering that risk for them. The hope is that six or twelve months on, the restaurants will secure their own premises and take over from there, and we will move into new areas.”
“Food is the area we play in and we’ll be sticking with it because it’s a wide category. We’re not going to deliver iPads or work for Australia Post – just food. By revamping our colours and logo, we are able to incorporate this into services and products we rollout in the coming months and years.”