Johannesburg - The app set up by Mr D Food – formerly Mr Delivery – has allowed it to be a location-based business where its clients log in and order from restaurants around them and the company collects and delivers for a flat fee.
“Up until 2016, 80% of the orders were over the phone,” said Devin Sinclair, the head of Mr D Food, in an interview with City Press this week.
Now 95% of Mr D Food orders are received through the app, which has been downloaded more than 200 000 times in the past six months.
“In 2015, about 99.9% of food ordering in South Africa took place offline, but in more developed markets, online delivery orders stand between 30% and 56%. So, market opportunity is immense.”
On the industry’s general outlook, Sinclair said: “Globally, the online food delivery business is booming.”
In the US, online food delivery is worth an estimated $30 billion (R398 billion) and has the potential to grow to $210 billion, according to a study by investment firm Morgan Stanley.
In South Africa, the industry was booming too, with Mr D Food taking up to one order every second, he said.
Sinclair said he expected Mr D Food to double its earnings within the next six months.
He said the three advantages held by his business over competitors were variety, coverage and cash provision.
Regarding variety, the company boasts the largest network of restaurants that clients can choose from, according to Sinclair.
This amounts to more than 1 400 eateries, including the large fast-food chain brands and independently run restaurants.
As far as coverage goes, Mr D Food services more than 1 900 suburbs in 54 regions, giving it the largest footprint in the food delivery sector.
And, in terms of the third differentiator, the business is still one of the few which accepts cash payments.
Mr D Food’s largest competitor is UberEats, which is available in Johannesburg, Cape Town, West Coast, Centurion, Pretoria and Stellenbosch, and has more than 700 local restaurants on its platform.
UberEats charges a delivery fee of R20 an order.
Mr D Food employs about 100 people but has at its disposal more than 1 000 drivers. This enables it to stick to its 15-minute delivery target at all times.
Mr D Food charges a flat fee of R35 for all orders instead of a percentage of the value of the order amount.
“We operate in a small radius because we do not want the food to travel for more than 15 minutes,” Sinclair said.
“That is why our network is so big. It has been substantially re-engineered into an end-to-end technology business by a new management team in order to take advantage of the momentum in the online food delivery sector.”
The food delivery business has transformed greatly since Mr Delivery was established back in 1992 in Cape Town.
Now, with a tech overhaul and a name change, the business is set to make the most of new opportunities in the market.
Mr D Food’s app has allowed it to be location-based business where its clients log in and order from restaurants around them and the company will collect and deliver for a flat fee.
Sinclair said that the business edges its competitors in three important areas, which are variety, coverage and cash provision.
The food delivery business has transformed a lot ever since Mr Delivery was established way back in 1992 in Cape Town and the new-look business has now been re-engineered and overhauled to take full advantage of the vast opportunity that exist.
Sinclair said shortly after Takealot bought the quarter century-old Mr Delivery in 2014, it underwent a total makeover and that included expansions and a minor name change.
It’s now called Mr D Food.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.