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by gruez 776 days ago
Is there some sort of barrier preventing those Asian competitors from entering Western markets? If it's as simple as you make it out to be, they should be swooping in and eating the incumbents' lunch with their lower overall costs.
3 comments
Ekaros 776 days ago
They don't have the venture capital to burn at start... It all begins with dumping. First prices and intro offers are unsustainable... You can not start competing when other side started by burning massive piles of money.
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gruez 776 days ago
Right, but investors were happy to fund those intro offers with the hope that they'll be rewarded in the end with market share. In fact they were funding multiple competing companies (eg. uber eats, doordash, grubhub). If the Asian competitors are fundamentally cheaper than their Western counterparts, then it'd be a non-brainer investors to invest in them instead, because over the long term they'll have a cost advantage.
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Iulioh 776 days ago
The problem is that almost every kind of company entering markets to compete would have to spend an ungodly amount of money for advertising (you have to let people know you exist and drivers that you are offering a job) and the setup cost are high too.

It is simply expensive to ENTER the market and you will have to have high prices for at least the first period but with them there is no incentive to use you.

And if you give an artificially low price for your service (let say on the long term you can pay the initial fees maintaining lower prices)then the whole thing is still super risky.

It can be done, there are just more safe endeavors.

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mbreese 776 days ago
First mover network effects. Also, not knowing the market. It’s hard for a company without at least a cursory local presence to get local restaurants to sign up for things. There is a significant burden on the restaurant to get onboarded for a delivery company, so there has to be a good reason to do so.

But, there is definitely a margin to be had here… if you could have a lower cost delivery service that managed the white label backend like DoorDash, I’m sure you’d see companies flock to it for their in-app delivery. (Think McDonalds delivery ordered in the McD app)

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