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LINE invests aggressively and aggressively in food delivery: aiming for “delivery hall” and “super app”

LINE will invest approximately 30 billion yen in a delivery service building that operates a home delivery service on March 26Announcementdid. The company is drawing on the concept of “super application”, which provides comprehensive services for everyday use, such as payment and commerce, within the message application “LINE”, and believes that food delivery will be the key. By placing the delivery house under its umbrella, the Uber Eats and other brands are aiming to be the overwhelming number one in the Japanese food delivery market, where the presence is increasing.

On March 27, the next day, a financial results briefing for the delivery house was held, where Toshie Nakamura, President and CEO of the company, spoke about the aim of the investment. Mr. Hideo Fujii, O2O Company Chief Exective Officer, and Mr. Shoji Fujiwara, Chief Marketing Officer, O2O Company Executive, spoke about the future strategies of the food delivery business.

Presentation of financial results at the delivery house. This time, LINE members also appeared

Presentation of financial results at the delivery house. This time, LINE members also appeared

LINE partnered with the delivery house in May 2016 and acquired a 22% stake in the delivery house in October of the same year. LINE will invest approximately 15 billion yen in the delivery house together with the Future Fund. Mirai Fund is an investment fund in which 90% is owned by LINE's largest shareholder, NAVER J. Hub, a group company of NAVER in Korea, and 10% is owned by LINE. With this investment, LINE will hold about 36% of the shares and Mirai Fund will hold about 25% of the shares.

Competing against fast-growing Uber Eats-service integration

Since the capital and business alliance, the two companies launched the LINE Delima food delivery service, which allows users to easily search and order from the LINE app in July 2017. However, Uber Eats is rapidly increasing awareness and the number of stores handling it, and China's DiDi has announced that it will enter in April, so at this timing we will want to invest a large amount of 30 billion yen at this time. .

In the delivery hall, which is funded by LINE, [1] expansion of direct-management bases and strengthening of sharing delivery services that can compete with competitors, [2] sales expansion to develop new customers, [3] effective marketing strategies To improve advertising efficiency, [4] upgrade the system, [5] expand the cloud kitchen, enter the takeout area, and [6] improve delivery efficiency.

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Specifically, optimize the database of the delivery house user, member stores, order information, etc., optimize the tracking system, integrate the delivery house ID into the LINE ID, and visualize the KPI such as the number of orders and the number of active users The company says it will develop BI tools, upgrade management tools for stores, market using LINE's 83 million user base, promote delivery services and takeout services.

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In addition, the two companies will change the name of the "LINE Delima" business to "Delivery Hall", transfer the takeout service "LINE Pokeo" to the Delivery Hall, integrate the services into the "Delivery Hall", And a marketer from LINE to the delivery house.

“Aggressive and aggressive investment” toward super application

In the second quarter of the fiscal year ending August 2020, Dedemae Kan's sales increased 22.7% year-on-year to 3.8 billion yen, but it had an operating loss of about 1 billion yen. Sales increased due to an increase in the number of orders due to the expansion of franchisees along with the expansion of sharing delivery and aggressive sales promotion activities. On the other hand, profits declined due to the expansion costs of directly managed bases and the increase in operation costs, and the focus on advertising using Mr. Hamada in downtown from the end of 2019.

In such a situation, the delivery house needed to obtain more funds to compete with the well-funded Uber Eats. Nakamura says, “I think this is the biggest decision in my life. After various studies, it was only LINE that we had all of the“ money ”,“ system ”, and“ marketing ”that we lacked. It will always grow rapidly. It will be a confident investment. "

Mr. Toshie Nakamura, President of the Delivery House

Mr. Toshie Nakamura, President of the Delivery House

Global food delivery ratio

Global food delivery ratio

Mr. Masuda of LINE, who is also an outside director of the delivery house, said about the synergy between LINE and the delivery house, "In order for LINE to become a super application, it is important to increase the number of daily uses", and overseas food delivery applications The company emphasized that some services started as a business and then became super apps.

He also considered investing at a slightly lower price at the outset, but said, "We discussed with management, and the area of ​​food is still necessary for us to become a strong platform. We were able to unite when we invested, "he said.

Mr. Jun Masuda, LINE Director

Mr. Jun Masuda, LINE Director

Super application concept

Super application concept

* In the future, President Nakamura of the delivery house will be appointed chairman, and Hideo Fujii of LINE, who is also in charge of takeout service "LINE Pokeo", will be appointed president of the delivery house. Mr. Fujii explained that compared to major food delivery services in the United States and South Korea, the delivery house has a large difference in both transaction volume and the number of active users, and that "the delivery house has a potential up to nearly 10 times." By supplementing restaurants that do not yet support delivery with sharing delivery, the Japanese food delivery market is expected to grow further.

Hideo Fujii appointed president of the delivery house

Hideo Fujii appointed president of the delivery house

Comparison with major overseas delivery services

Comparison with major overseas delivery services

In addition, by combining LINE's [1] user base of over 80 million users, [2] high instantaneous rate of opening rate, and [3] licensed location information data, LINE will be able to reach consumers in Japan. He explained that an approach such as recommending dishes would be possible. "I want to make delivery and takeout everyday in Japan." The company has decided not to decide when it will be available, but hopes to support eat-in and mobile orders in the future.

Synergy between delivery hall and LINE

Synergy between delivery hall and LINE

How do you fight "Uber Eats"? What is the impact of the new corona?

During the Q & A session at the briefing, questions were asked about measures to counter the competitor service Uber Eats and the impact of the new coronavirus on orders.

Mr. Nakamura of the delivery hall stated, "I will go straight and safely and safely. Our delivery staff will always come to the base in the morning and check their physical condition and appearance. In order to deliver, we receive a solid training for three and a half hours and leave it only to those who are okay with this person, '' said the superiority of the high quality of the delivery staff and the thorough check system in daily hygiene. As mentioned.

New coronavirus countermeasures at the delivery house

New coronavirus countermeasures at the delivery house

LINE's Masuda also commented, "By making the delivery service building's portal and share delivery a hybrid, we have the advantage of being able to tailor it to each area. The organization can optimize the number of people according to demand. The company is also responsible for hygiene. The strength of the sincerity that this delivery house has been doing for 20 years is that it can be multiplied by the LINE group and raised. For example, with LINE ID, personalization using LINE's preference data can be done. " We emphasized our unique strengths.

Regarding the effects of the new coronavirus, Mr. Nakamura stated, "The number of orders per week is not disclosed, but the growth has been remarkable since the end of February. Inquiries from stores have increased three to four times as usual. We are increasing our staff so that we can join and open the restaurant. "

In addition, Tokyo Governor Koike's governor has asked Tokyo residents to refrain from unnecessary and urgent outings on the last weekend of March 28 and 29, and the need for food delivery may increase sharply. is expected. Regarding this response, "From the end of last year, we broadcast a commercial [using Mr. Hamada in downtown], and since this year the number of repeat orders has increased due to the influence of the new coronavirus, we have already dispatched vehicles, personnel and systems Are increasing. " In addition, he explained that it also supports non-contact delivery in which "placement" in front of the entrance can be selected.


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