SEOUL – Germany’s Delivery Hero has agreed to buy South Korea’s top food delivery app operator Woowa Brothers for $4 billion.
The deal, announced on Friday by Woowa, is the biggest global play so far for a food delivery application, one of the hottest tech sectors around. Woowa said the sale was “a survival strategy” in an intensely competitive market and also the biggest deal involving a South Korean internet firm.
South Korea, with a dense population and a high smartphone penetration rate, is the world’s No. 4 market for online food orders. A huge jump in the number of single people living on their own is also propelling the boom in food delivery services.
“The (food) delivery market has been flooded with gigantic Japan-backed capital and influential online platforms, leading Woowa to factor in partnership as a survival strategy,” said a spokesman at Woowa Brothers.
South Korea’s online market for food delivery and pickup has more than doubled over the past five years to $5.9 billion – bigger than Japan and Germany’s markets combined, and trailing only China, the United States and the United Kingdom, Euromonitor data also showed. Euromonitor expects the South Korean market to jump to $9 billion by 2023. (Reuters)
