Hi, good morning everyone, welcome to today's conference call. We trust you have all seen the press release in the morning and have also received the quarterly statement and also the slide deck for this call by email. If not, all documents are of course available on our IR website. Niklas will start the call with a strategic overview, and also a summary of the most important milestones we have achieved in the past quarter. After this, Emmanuel will present the key financials and the case study on the underlying profitability. After that, as always, there's time for your questions. Already now, let me say it would be greatly appreciated if you could limit yourself to two questions per person so that we get a chance to take questions from everyone. With that, thank you, and let me hand over to you, Niklas.
Hey, everyone, welcome to our call today. Hope you're staying safe and healthy. I've opened the call at the end of August by saying that we had a good start into Q3. It turned out that the quarter actually was a fantastic quarter for Delivery Hero. We are really happy and proud to present this result and also shed some more light on the profitability of our business, which is an area of interest for all of us. Before going into the business and financial update, let me reiterate our vision on slide two, as this is really the bottom of why we are doing things the way we do. We always aim to deliver an amazing experience, fast and easy to your door.
This has defined our focus over the last few years, and we now see it in accelerating growth in areas such as grocery delivery. We think it's humbling to see that several of our competitors now following our lead, while we still believe that we're far ahead in this development. Big thanks here to all the heroes doing a tremendous job pushing the experience every day, especially in these challenging times. Thank you very much. We continue to pursue the targets we set out during our IPO in 2017. We promised growth, and we are very confident we'll deliver on these promises. After having raised our guidance for the current business year already in July, we are today already confident to reach the upper end of that increased guidance and are therefore narrowing the guidance to the upper end of the range.
Emmanuel will talk more about that in a moment. Secondly, we go for leadership positions in the markets we operate in. We have been very committed to this, and we will do what it takes. I'll share more on this next slide. To achieve leadership, our third commitment was to build tech and product leadership for a third generation on-demand platform. During the last years, we went from decent to a clear leader in most tech and product areas. I believe our tech architecture has been a clear advantage to achieve this. Finally, you know that we are believers in driving profitability for scale and automation. We are thankful for the trust of our shareholders who already believe in our ability to make own delivery also economical.
Today, we are providing some more details on where we stand and give some visibility to our way to truly profit from economies of scale. We continue therefore also to target a long-term EBITDA margin of 5%- 8% of gross merchandise value. Slide five gives you an update on where we stand regarding not only our global footprint but also the strength of our position. In more than nine out of 10 markets we operate in, we are the number one player, and we have further strengthened our position by gaining new leadership position in more markets this year. We are, as you know, still waiting for regulatory approval for the transaction in South Korea. I know this is something that you all are eagerly waiting for.
I can't give you any news on this today, but can just repeat that we are very confident to get the needed approval by year end. Closing will take another couple of weeks until we can finally start truly working together for the benefit of the ecosystem in South Korea. We are determined to support the restaurants and the local stores we serve as much as our customers. Having said in the past that we consider ourselves a rational consolidator, and I believe that the past quarter has proven that again, I will briefly touch upon some of the M&A we have concluded in the past quarter on the next slides. Before that, let me summarize the key highlights of Q3 on slide six.
Firstly and most importantly, we are truly happy to let everyone know, and in particular the skeptics around own delivery, that our own delivery business is now providing a positive contribution margin as a percentage of GMV in all our regions. Emmanuel will give you more details a bit later. After many years of investing time and resources into the execution of this part of the business, we are now really seeing the fruits of our investments. This is a step change for us, as now every order we receive helps to scale our business towards profitability. We are still in growth mode, and I think it's still not the time to aggressively push for margin expansion, but it is clear that we are now entering a new phase of our development. Beyond this, we also had a great quarter as far as growth was concerned.
We doubled our orders year-on-year. We had a record sequential order growth of 81 million orders, partially also driven by a little bit Q2 COVID impact. Nevertheless, a big record. As announced at the end of July, we launched in Japan and had a very encouraging start there. In the important MENA region, we have not only strengthened our footprint with the acquisition of InstaShop, but also signed a deal with Mastercard that will be a significant relevance for our development and our economic success in the next years in the MENA region. In the Americas, we have used the opportunity to acquire Glovo's operation there by strengthening some of our existing footprint further, but also added five new countries. Finally, we have also executed on our ambition to have 400 Dmarts up and running by the end of the year.
We have added another 106 of those stores in the quarter, bringing the total number to 254 by the end of September. In October, we added another 100 stores. I think as you've learned over the years, we stay firm on our targets and commitments, and this won't be an exception. Now, some of the financial highlights. We achieved another quarter with around 100% order growth. Our GMV was up by 70% year-over-year to EUR 3.4 billion. On the back of the strength of the euro, growth on constant currency was 81%. These numbers do not include Woowa. With Woowa, we would have been around EUR 2.6 billion. 6.2, my apologies. EUR 6.2 billion, including Woowa. Revenues in line with order growth, with an increase of 99%. This was a slight acceleration from Q1- Q2. On a constant currency basis, revenue growth was even stronger, 110%.
Before handing it over to Emmanuel, let me give you a recap of our M&A activities in Q3. In September, we signed a deal with Glovo for the LATAM operations with Peru, Ecuador, Costa Rica, Honduras, Guatemala. We added five new countries to our business. We now have a good starting point there and are looking forward to developing these markets further and keep on driving market share next year and beyond. As part of our transaction, we have also been able to do some in-market consolidation in Argentina, Panama, and the Dominican Republic, which obviously helps to strengthen our footprint in these markets. Based on July GMV run rate of around EUR 330 million, the purchase price of up to EUR 230 million corresponds to an enterprise value to GMV multiple of around 0.7x. This also is including the earn-out.
As the closing actually happens, this multiple will be slightly lower. Assuming full earn-out at today's size, it will be 0.7x GMV multiple, and we think that is an attractive one. Having already discussed InstaShop in a bit more detail in the call at the end of August, I won't cover all the aspects again today. As a reminder, InstaShop is the leading online grocery marketplace in MENA, and showing an astonishing 330% growth this year. It is a great fit to our current online groceries offering in the region, and we're determined to expand its offering to additional countries together with the existing management team. In addition to the acquisition of InstaShop, we have signed another important deal in the past quarter that will have a very positive impact on our offering in the MENA region.
If you go to slide nine, you can see the main components of the partnership with Mastercard. The objective is to fully digitalize the payment chain within the Delivery Hero ecosystem in the region. It builds on us having developed digital wallet solutions for our riders, customers, and restaurants. This was born from our vision to create an amazing experience for our customers. We have developed digital wallets and have quickly realized that this offers many advantages for everyone involved and can help lower our payment costs considerably. The partnership will help to develop these solutions even further and integrate them deeper into our offering and the entire payment chain. We love to dive deeper into the economic attractiveness of the partnership but are bound by confidentiality clauses.
We therefore ask you to trust that this is a very good deal, not only for our customers, riders, and restaurants, but also from a financial perspective. I think this gives a good segue over to you, Emmanuel.
Thank you, Niklas. Good morning, everyone, also from my side, and welcome to the third earnings update of 2020. I'm very much looking forward to giving you an update on where we stand today. This is for two reasons. The first, because the numbers are really outstanding and once again show the strong and the very positive momentum we have. Second, because we are certain that the additional disclosure we're giving you today is hopefully enabling you to fully appreciate the underlying strength that we have been able to build over the last years of our business. Before we come to that, let's start with our group financials on slide 11. Niklas already mentioned the strong headline numbers, and maybe to remind everyone that this is by far not the first quarter with that kind of growth.
This is instead the seventh consecutive quarter with year-on-year revenue growth of around 100%. Outside the financial metrics, we have again decreased the global delivery time further and now stand at 25 minutes on average. By now, many of you know the next slide, the next chart, on which we show the order development index to the date where COVID was declared as a pandemic. What you see here is that after the very first phase in March and April, which was characterized by many and very strict lockdowns and curfews, the order growth has basically returned to its very healthy structural growth in all of the regions. Also in MENA, all our meaningful restrictions have been lifted, although it was only at the end of August when it was the case in Kuwait.
In the meetings that we have had with you in the last month, we have often been asked about the quality of the cohorts that have acquired during the pandemic. For those customers we acquired in March and April, we have now at least half a year of track record so that we can now start to make some first assessments and solid analysis on their behavior. What we see is that the behavior is at least in line with the older cohorts, which is obviously very encouraging. We continue to expect that the situation due to COVID has rather accelerated the structural shift to more online ordering of food, but also groceries, in that most of the current effect will have a permanent and therefore positive impact on us.
The average order values, also in line with our expectations, have gradually retraced to our pre-COVID levels in most markets after the immediate effect of lockdowns has receded and customers partly went back to work and have had more of an ability to do grocery shopping themselves. Now let's move to our first segment on the next slide and start with Asia. Here, I'm happy to say that order growth surpassed our expectations. Despite the increasingly challenging comparables, the segment posted order growth at 178% year-on-year. You also see here a significant increase in the share of own delivery orders, which account for 78% of orders in the quarter, compared to 55% a year ago. The revenues were almost as much with 162% on reported basis and with 170% on a constant currency basis.
We also kept pushing for operational improvements, and the overall delivery time improved by 14% year-on-year at now 23 minutes. In Korea, we invest in our own delivery service and also leverage our technology to that extent, and they're being able to deliver in 20 minutes versus the usual 30- 35 minutes. Let's move to the next segment, MENA. As you know, MENA has been impacted by very strict lockdowns and curfews, and that the results of this even show negative year-on-year growth of 6% in the last quarter in Q2. In Q3, operation had a very good recovery from this and generates an order growth of 40% over Q3 2019. Again, this is despite the fact that some of the countries, part of the quarter was still difficult with restrictions still prevailing. Here, I'm thinking about Kuwait.
GMV grew by 30% on reported currency and even 44% on constant currency basis. The revenue went up by 27% and by 38% if adjusted from the adverse effects coming mostly from the Turkish lira. Let's move to the next slide and show the development of our European operations. Our Europe segment has another very strong quarter with actually the strongest order growth since IPO. The order grew by 55% and thereby nicely accelerating sequentially after already 47% growth in the prior quarter. We believe that have been outgrowing our competitors, at least in overlapping markets. The GMV increased even stronger by 65%, and revenues went up by 88%, thanks to very good customer acquisitions and also improved cohort behavior. Next slide, Americas. Americas had the second quarter with the orders more than doubling.
Having grown by 111% in Q2 already, Q3 came in the same level with order growth at 112% year-on-year, and we continue to see clear acceleration. The segment's shown a similar strong jump in the share of own delivery orders as the Asia segment. The OD share is now standing at 76%, which compared to 49% a year ago. The GMV of Americas went up by 103% on a reporting basis, and even by 149% on constant currency base, as far we know, the fastest growing LATAM food delivery company. The revenues increased by 157%, and even by 178%, if adjusting from the headwind from FX effects. Here again, the revenues, as well as the GMV for Americas have been impacting by the application of the IAS 29. That means the hyperinflation accounting for Argentinian operations.
This came to play, as you remember, this came into action since September 2018. The impact of this, considering Argentina as a hyperinflation country, was a negative of EUR 6 million in Q3 2020 regarding GMV, and a negative EUR 1.4 million in terms of revenues. Finally, let's move to the Integrated Verticals Segment on the next slide. As you all know, the segment capture the activities where we are operating as a principal, i.e., where we are in full ownership of Dmarts and the kitchens that we operate. As a reminder, the Integrated Vertical orders and GMV shown here on this slide are only shown for illustrative purposes. We are currently accounting for in the Platform Business Segment as it is on the Platform Business infrastructure that the order and also for the Dmart have been placed.
The rapid expansion of our Dmart business contribute to a strong order growth of 64% quarter-on-quarter, and the GMV stood at EUR 54 million in Q3, up 41% compared to the prior quarter. The decline in AOV, or average order value, is due to both the strong expansion of Dmarts, but also the end of restriction and lockdown, which before have boosted AOV for many customers who had to rely more than usual on ordering groceries online. We have also pursued an intensive rollout of new Dmarts in Q3, adding 106 such warehouse after 44 new Dmarts in Q2, ending the quarter at a total of 254 Dmarts now active. We still expect to reach our plan, as Niklas mentioned, of 400 Dmarts by the end of the year, despite challenges to open stores during the COVID.
So far, the review of the operative business for the past quarter. Now let's unveil the underlying profitability of especially own delivery business in the case study that we prepared on the next two slides. What we are showing now on this slide number 19 is the contribution margin as a percentage of GMV for our own delivery business. Obviously, it comes as no surprise that you operating a profitable marketplace business is a relatively easy endeavor. It is the own delivery business where the going gets tougher and where you need to decide if you really want to do it or not. Because doing it half-heartedly and without conviction will only result in very mediocre result at best.
We have decided for ourselves a few years ago, or a few years back, that putting in place superior last mile logistic capacities will pay out at the end. Now looking at the lines that you see on the charts and the numbers behind this, we think this is clear that we are now seeing that the decision is starting to pay out nicely. We are now earning money for each incremental order that is being placed in any of the four regions. While MENA has been profitable for many quarter now, we are super happy to see the improvements made by the other regions. Americas and Asia have both shown a particular strong improvement in recent quarters, and both are basically profiting from the economies of scale and the constant improvement in the best practice that we've been implementing across the group.
A large part of this improvement has been due to delivery cost reduction, thanks to a better utilization of the rider fleet, but also overall efficiency gains in various areas, such, for example, for the contact center in the Americas. In the Asia segment, we have seen the investments in the form of free delivery campaigns for a good part of 2019 that are now contributing to the order and the revenue growth as shown before in the segment presentation, thanks to the customer we have acquired during this phase. Finally, and to counter to sometimes voiced assumption that own delivery only works in countries with a relatively low cost structure. We find it very encouraging to see that also Europe is already well in positive territory. The recipe here is the same as the other segment.
Attention to detail in every part of the operation, a relentless effort to find and implement efficiency gains whenever possible. As we are also well aware that many of you also constantly ask about the level and impact of the vouchers, or generally speaking, revenue reduction, we are using as part of marketing to attract new and/or retain and activate existing customers. For us, we have gone a step further and have on the next chart shown the same data after deducted cost of this marketing tool. What you see on slide 20 is that also with this even more conservative view, three of the four geographic segments are already earning money on own delivery orders. MENA, Europe, and Americas are all in positive territories. Only Asia still needs to go a couple of more steps into that direction.
Looking at the improvement that the segment has made in the past quarters, the direction is clear. Also using this opportunity today to give an update on how we see the usage of vouchers. In 2019, we saw a peak in the use of these marketing tools, as you can see on the right-hand side of the slide. As expected, but also announced, in 2020, this level is coming down. In H1 this year, we already went below the level that we've seen in H2 last year, and we're expecting a further decline from here until the end of the year. To avoid any misunderstanding, we're still considering vouchers and similar incentives to be a very productive tool to promote the usage and also the first-time adoption of our service, and they will continue to be part of the tool set going forward.
The centralized and data-driven approach that we have allows us to ensure high efficiency in our marketing and a good return on our investment. Before we take your questions, let me give you an update on our outlook of the current business year on the next slide. As Niklas pointed out already, and on the back of the very strong operating business performance for the first nine months of 2020, we are again increasing our outlook for the full year 2020 revenues. In July, we raised this total segment revenue guidance to a new range of EUR 2.6 billion-EUR 2.8 billion, up from EUR 2.4 billion-EUR 2.6 billion before. We are now confident to come out at the upper hand of this range and are therefore changing our guidance to a range of EUR 2.7 billion-EUR 2.8 billion.
The outlook for the adjusted EBITDA remains unchanged. Here we continue to expect an adjusted EBITDA margin of between -14% and -18% of revenue. We have stated that this guidance is excluding additional investments that we intend to utilize to defend our leadership in selected markets where required. In July, we have specified that amount to be up to EUR 150 million and therefore less than the up to EUR 200 million we had reserved for this going into the year. Today, we are reducing that number again up to EUR 220 million that are still including between EUR 20 million and EUR 30 million for the launch in Japan. These are the changes to our guidance, with otherwise stays unchanged. That was it from our side, well, we are now looking forward to your questions. Thank you very much.
The first question is from Joe Barnet-Lamb, Credit Suisse. Your line is now open. Please go ahead.
Excellent. Thank you very much, Niklas, Emmanuel, and Daniel, for taking my questions. Two from me, please. Firstly, with regards to those additional investments, you've obviously now nudged that down twice, and you've also added in Japan. Can you talk a bit about why you're spending less than your originally stated upper end? Is it to do with more benign competition? Just a little bit more color around that would be great. Secondly, with regards to the contribution margin slide. Thanks very much for disclosing this. It's absolutely fantastic. A couple of questions on it. Firstly, how much benefit is there in Q2 and Q3 of 2020 driven by COVID? Secondly, do you believe that Asia and Americas can get to the MENA level? If so, how long will it take? Thank you.
Maybe I'll start with the first one. When you enter a new year, you don't know how tough the competition will be. We expect that it will be a very tough year in many regards. I think it turned out that most competitors pulled back a little bit or went a little bit more towards economical side, being a little bit more focused on efficiency and profitability rather than grow at any cost. That's why we didn't feel like we had a need to invest the full amount, but pulled back a little bit on investments. I think most of the investments that we did was rather opportunities that we saw that had very good returns, and only some of it was driven by comparative pressure in a couple of markets.
I think despite not having used the full amount, we see that we actually increased leadership in six countries this year, and we have lost leadership in no countries this year. It's a net gain of six markets that we gained leadership organically. I think that also points us to direction that we have done many things right. Maybe Emmanuel, you can cover the second question.
Yeah, sure. On the contribution margin, if you look at how much benefit we get in 2020 from COVID, I think like MENA, obviously we didn't have so much benefit, as you know, because many markets have been impacted by COVID and restriction and curfew. The other one, I would say, if there is any kind of benefit of COVID, this is not the full story behind it. We've been working on the decrease of the CPOs, of course, per order, working hard on efficiency gain in terms of logistics. Not only, I mentioned before the contact center and so on and so forth. I think this is much more the trajectory of our efforts, well, to improve this unique economics that you've seen.
I think if COVID, and it's difficult to quantify, there may be a positive impact for three of the four segments, but definitely not for MENA. I think the curves that we're showing you today are much more the consolation of the efforts and the focus that we've done over the quarters and as I said, efficiency gain, in terms of CPO, but also like your other parts of it. Where can it go now from here, in Asia and Americas when you get to MENA? Yeah, that's the billion-dollar question. We think we can still improve. Like just for sure, we'll continue to work on this and there will be gains in terms of efficiency, but also we can focus on how we can maximize our revenues. Will we get to the MENA level? That's too early to say.
This is a challenge, but this is, I think too early to say, and also how long will it take. We will continue to work on this, to improve this, and to push this curve as far as we can.
I think to clarify
Excellent. Thank you both very much.
Maybe to clarify, Andrew, moving to MENA level on a gross profit to GMV, that we will do. The question is how high will MENA be at that point in time? We also expect to improve MENA segments gross profit to GMV. The question is if we will catch up in the long term to the same level, but we will surely reach the MENA level as of today.
Excellent. Thank you for the extra color. Thank you.
The next question is from Giles Thorne. Jefferies, your line is now open. Please go ahead.
Thank you. The first question was again on the profit contribution for own delivery. I suppose it's really a question about the limits of the business model, really. Quite a high-level question. You don't have to look too far to see the groundswell of change towards labor regulation and the news out of Korea about your riders becoming salaried employees is just one of many examples. It's my understanding that the improvement in your profit contribution per order thus far has mostly come from the efficiency lever rather than anything else. My question is, if you see input cost inflation around the rider costs across your entire business, how much do you think the other levers of delivery unit economics, namely the basket size, the delivery fee, the commission, how much do you think those can absorb any input cost inflation?
A discussion there would be really, really useful. The second question was a question actually I asked at the Q4 results, and I'm going to ask again now with the benefit of an additional six to nine months of trading, and it's around the conflict of interest between a merchant partner and dark store concepts in quick commerce. The question's really prompted by, again, news flow out of Korea, where we've seen the Association of Convenience Stores start to moan about cannibalization of delivery orders by dark stores. Not yourself. It's actually Woowa thus far. Anyway, how do you manage that conflict of interest? That was it. Thank you very much.
Cool. Hey, thank you. I quickly cover those two questions. Yes, the improvements have been mainly through efficiency. We haven't really increased any fees or delivery fees, and more than potentially marginally. In general, the main lever is rather on the rider efficiency. I think there is still a lot of efficiencies that we can do. There's still a lot of improvements that can be made on reducing delivery distances and having less wait time, et cetera, et cetera. It really comes down to the details. It's an enormous amount of details. There are 100 things to be done to improve there. Of course, if labor regulation in some country would go to a less optimal setup, and I really say less optimal setup because this is not a setup that riders want.
In such setup, they will make less money, and they will have less freedom. It's really a lose-lose for the riders, and riders don't want it. There will also be much less riders working, because we are then in control of efficiency rather than themselves in control of efficiency. If we say efficiency, we need also have stronger control of our rider fleet than we have today. Really inefficient way of setting it up and the biggest loser of this is, of course, the rider. It's not necessarily good for restaurants either. In the end, our platform needs to make money. We are not charity, so in the end, we will have to make money, and we will have to adjust. If there's something that is increasing the cost level and making it less efficient, then of course someone has to pay for that inefficiency.
As I said, it cannot be the platform, so therefore the loser will either be the users, the restaurants or the riders. Unfortunately, I think there will be all the three of them, who would have to cover this cost. It would be very unfortunate, really. I know the question if you make money on OD is a little bit half ridiculous in my view, because it depends how much you charge. You can charge more delivery fee or you can charge the restaurant more. Of course, you might take down contribution margin by doing so, but there's plenty of room. It's just where you set the level. When it comes to emerging under the partners and the Dmarts. Yeah, I conceptually get that conflict, and I think there is a very easy parallel to draw.
If you look at it from the other way, we're working with 30,000 partners, and we today have 250 Dmarts. The Dmarts are only there to cover something that those partners cannot do. They cannot do fast delivery. They cannot do fast picking. They have certain suboptimal setup for delivery. It's not that Dmart is taking over for the grocery aspect. Dmart is taking over for the emergent need of getting something small delivered to you. No grocery in the world would do what we do with the Dmart because that will not be cost efficient. It will not make any money. We take a loss making part of their business, make it profitable and make it possible, what they cannot make possible. It's not really cannibalizing anything on what they do.
It really solves something that they cannot solve in that setup. We will also be happy if they will be the owner of these Dmarts and use us as a franchise for some time. Right now we are taking the risk, and we are doing it right now. That could also be a solution for the future. Also we do not prioritize our Dmart. Our customer chooses it because it is faster, and any grocery store can try to do the same.
The MerryMart agreement you've got in the Philippines where they're going to own the dark store. Do you think will we see a lot more of that?
I think there is a possibility. I know in the beginning we want to optimize for perfection in the setup and do all the learning. In the beginning now we feel like we are the right owner to making sure we have that full flexibility and control. There is nothing that says that we could or would consider this as a franchise model, where we give them the tools and the possibility to build their Dmart and we are the agent there.
Thank you very much.
Thank you.
The next question is from Silvia Cuneo, Deutsche Bank. Your line is now open. Please go ahead.
Good morning. Thanks for taking my questions. The first is about the upgraded revenue guidance. If we take the midpoint, the implied segment revenue for the last quarter would be 75% year-on-year, which means a marked deceleration from the rate year to date of 95%. Can you please discuss if there is any tough comp effect that could explain this or whether you are seeing a second wave of COVID not having as much of a positive effect on order in some markets? My second question is just on the partnership with Mastercard. Can you please discuss the vision around adding payment solutions for customers? For example, is integrating these services a way of making users and perhaps drivers more loyal to your apps? If you could comment on whether your peers are also already doing something similar, I think Rappi is.
Thank you.
Emmanuel, do you want to cover?
Yeah, sure. I think for your first question and taking the revenue guidance, I think it's fair to say that with this very special year that we are facing, and it's not done yet, we remain certain. There's a certainty on how the change of COVID dynamics will have an impact on the business. When you look back in Q2, the impact was very different, comparing the regions. If you compare MENA to Asia, for example, and then taking this experience, let's say, or this what you've seen in the quarters, we remain prudent for the next quarters.
I think it's fair to say that so far we've been happy with the start of the quarter. On the second question on Mastercard, the deal is going to be a deal where we have some financial aspect to it, obviously, which I can't give too much details today due to the clause in the contract, but this is a very interesting financial contract. On top of that, we have some collaboration on the technical part of it. The benefit would be for the ecosystem as a whole. In the first place would be customers, but also our riders using the wallet and all different kind of products that we want to develop with Mastercard. This would be for the benefit of our ecosystems in the region in MENA.
We will disclose probably more details as we're going to launch these services or these new features, but this is a benefit for riders, customers, and also vendors or restaurants. That's the spirit of this deal with Mastercard that we're super happy to bridge, which is one of the largest Mastercard deal in the region ever.
Maybe add a little bit on the revenue guidance. We're also comparing to a very, very tough quarter, and at that quarter, Asia grew at 261%, up from 211% the previous quarter, and 114% in the quarter before. Asia taking a bigger portion of that back then in end of 2019. We are really comparing to a very, very strong quarter when we doubled down on affordability and other measures which you saw before. It's really a function of size and scale. The other aspect also to keep in mind is FX. We have seen Euro strengthening a lot lately, which also impacts our revenue on a reported basis, negatively. On a constant currency, obviously not. On a reported basis, that has also contributed to that.
I think, we had a great start of Q4, but we'll be comparing to a very tough quarter.
Thank you.
Thanks.
The next question is from Andrew Porteous, HSBC. Your line is now open. Please go ahead.
Yeah. Team, thanks again for taking my questions. Just echoing thoughts before, the detail on the contribution margin side is very helpful. With the detail you've given, I'm just wondering sort of what the thinking about the sort of the move from pre-voucher to post-voucher. Have you got any experience of consumer behavior as you reduce vouchering? I'm just trying to understand really whether there's a risk that the positive impact of reducing vouchering may be partly offset by a drop back in efficiencies or such as frequency or basket sizes as some of that subsidy is removed from customers. Secondly, I know you talked previously a lot about more rational competition.
I'm just wondering if that's something that you continue to subscribe to and whether you feel that everyone in the industry has been benefiting from some of the impressive trends we've seen at the sector level, or whether you think you've been benefiting sort of disproportionately and extending your leads in a lot of markets.
Maybe I'll cover. First, most of the vouchers we do, we try to target to new users, but of course it's very hard sometimes to target new users. We have also done, at some occasion, platform-wide free delivery campaign over a week or two. Usually we try to make these vouchers very small because when you give someone EUR 10 to order, they will not order because they're hungry, they just order because they got a good deal. If you give someone on a 57 to EUR 1, or 2, maybe at the max, they don't order because you've got that. They use it, but it was not the main driver of the decision. That's why we have seen that the behavior of these customers have been very similar to other customers.
I should say that it's a little bit less, but it's still not as material as people would think or what has been communicated in the market. Even if there would be a slight impact of reducing vouchers and so on, and we are still going to grow very fast, in these markets. I don't think there would be an impact on efficiencies or so. We'll keep on driving efficiency from larger scale, even if 1% or 2% would be falling from less vouchers. What also means is usually that you have a slightly better basket. If you give someone free delivery with no restrictions on basket, they might order something very small. If they pay a delivery fee, you usually add one or two extra items because you don't want to order, maybe for next day, maybe order a meal for next day as well.
We see generally that the baskets usually increase a little bit, which is then also beneficial for us. Therefore, yeah, we don't expect much there negatively. In terms of COVID, some markets have been more affected positively. I know we've seen U.S. being absolutely booming. Similar we have seen in some Nordic markets. We have also seen similar, actually now in Europe in general, we have seen a clear uptick in at least some markets and some markets have been more neutral. Latin America, you're seeing that's probably positively impacted as well, but that's a small segment. I think proportionately we have been less impacted, or less positively impacted by COVID than in particular our American colleagues, where also baskets drastically increased, as we have seen.
I think the positive is that when each COVID goes away and hopefully soon, we will also not have as much of a drop when that happens, if there is some degree of drop. I think there will be some degree of drop with behavior, but we will be less impacted in that case. In terms of the markets we operate, we have definitely been, if it's COVID related or not, but we have definitely been taking market share and been winning market shares. I think that is with or without COVID. That is also our clear, not ambition, but our commitment. We will continue to do that also going forward.
Okay. Thanks, guys.
Thanks, Andrew.
The next question is from Michael Siebel, JPMorgan. Your line is now open. Please go ahead.
Yeah. Hi, everyone. Yeah, would also like to echo previous comments on increasing the reporting, particularly when it comes to contribution margin. Thank you, Emmanuel and Daniel, for doing this. One question I think that comes up is now what happens below contribution margin? I know you're not going to guide on EBITDA profitability per se, but if you could maybe give us an indication. What needs to happen to also turn positive at the EBITDA level? You're growing at 100%. You were highlighting that the returns on new investments are coming down. That leaves largely the, I guess, marketing angle left as a variable. How shall we think about this? At least, shall we think that it will also continue to follow the contribution margin gradually, or do we need to expect some hiccups on anything below contribution margin? That will be interesting.
Then two more questions, very short. The first one on Glovo. You bought the stake from AmRest. Maybe you could tell us a bit more why that is. I understand the LATAM situation, but why increasing the exposure with Glovo in Europe? Then thirdly is on the delivery share. Could you just tell us a bit more where do you think this share going in the next two years? It seems to clearly follow the Chinese example in terms of a high share of delivery share. Where do you think this is going to go in the next two, three years in your portfolio? Thank you.
Perfect. Yeah, no, we don't expect any hiccups on anything below there, but Emmanuel maybe you can elaborate a little bit there.
Yeah. No, absolutely. Yeah, we don't expect any hiccups below our profit contribution. I think our focus still is on growth. Like you've seen, we're doubling the company. Right now we're still focusing on growth. Obviously, EBITDA should benefit from this improvement of the contribution margin that you've seen today. We will continue to focus on improvement of the contribution margin. With the scale, EBITDA should then improve. That clear focus is now still on growth. We see the potential. We also see the potential not only in regions that all of us, where I think agreed on in Asia, but also now Latam and also Europe are growing extremely fast. Still, I think we will concentrate on growth while also continue to improve our unit economics. I think that no hiccups obviously be able to be expected.
Of course, market launches. When you do that, you have to scale up. Japan is one example, but there are a few other cases as well. Same with New Vertical. Of course, that is something that is very early stage. We are not at mature stage. You have to build the teams, the setups for this. In our core, no hiccups there. Glovo. Yeah, we are very happy what Glovo is achieving. We also see that it had a very strong execution. We are very happy with that investment, and we like to keep supporting that company. We are, of course, a substantial shareholder, and yeah, we saw it as a logical step to further increase our stake based on the belief that we have.
On the delivery share, I think there are markets where we see that there is a clear difference when we deliver versus when the restaurant is delivering, both in terms of inventory but also in terms of quality and speed and cost. In those markets, you would expect that delivery to go to 80% or even more. There are some markets where the difference between own delivery and marketplace is very little, in some cases even negative. That the restaurants find ways to even delivering things equally fast at a lower cost than what we can do, and every restaurant is delivering. We have no urge to then building delivery for the sake of delivery. Therefore, some markets will have a significantly lower share of OD. Of course, the combination of that is making the mix.
Therefore, we will continue to grow, but maybe not as fast anymore. Maybe in the markets where we do not do delivery yet because we see that the restaurant's doing it, I don't know, equally good or even more cost-efficient. As we improve our delivery efficiency, we may at some point even come to a point where we can do it even cheaper and even better than they do. Of course, at that point in time, we will also move OD to probably 80% in those markets as well. For the time being, that's not the case.
Okay, great. Thank you.
Thanks, Michael.
The next question is from Andrew Ross, Barclays. Your line is now open. Please go ahead.
Andrew, mute.
Andrew Ross, we can't hear you at the moment. Perhaps you're still on mute.
Otherwise, we can take the next.
All right, let's go to the next question. The next question is from Sherri Malek , RBC. Your line is now open. Please go ahead.
Good morning. Thanks for taking my questions. Firstly, just to follow up on the unit economics for own delivery and how this can improve further. I understand there's still a big opportunity to improve the cost per order. How would you rank the other levers? Basket size, delivery fee, and take rate in terms of their potential contribution to improving profitability longer term? My second question is on Asia. Basket sizes have continued to decline, I believe due to the accelerated mix shift to own delivery where AOVs are lower than marketplace. How have you managed to offset that such that you can keep to the EBITDA guidance? Has the operating efficiency come through higher than expected? Thanks.
Perfect. Maybe I'll cover the first, you cover the second question. I think out of the things that you mentioned, I think take rate is, or commission rate is probably not a lever that we want to pull. We don't think it's necessary, so that's probably a smaller delivery fee and we have been very generous towards the consumers. There is maybe some, a little bit room there. I think that's the last lever we would pull. Basket, yes, I think also there is some room for upselling and so on, but also not huge. I think that by far the biggest lever is that we can still improve our efficiencies. Making less waiting time, shorter delivery distances. How we manage the fleet, onboarding et cetera. That's really the lever we want to pull.
Of course, the other levers we can also pull, but we don't really see a need and that is really the last levers that we would use. As long as we have the big levers in efficiency, we will probably not pull many of those.
I can cover maybe the basket size from Sherri. Basically the basket size, we have to keep two things in mind I guess. The first one is the evolution of the year. With COVID, we mentioned this, that people going back to COVID in Asia, being less severe in Q3 and Q4 than Q2, then you have maybe some impact on the basket size as people are ordering now maybe more individual than for family. The second is we have to keep in mind the market mix. Some countries in Asia have different GDP structure and hence the countries that are growing faster than others have sometimes a little lower GDP than in general and hence the basket size is lower than you would have seen in the past due to this market mix effect.
You would have the sense that the basket size is decreasing a bit in average. This doesn't impact or should have no impact on the EBITDA itself for each country. The basket size impacted by the market mix, but the EBITDA should not. Does that make sense?
Yeah, thanks very much. That's really helpful.
I think we cut off Andrew a bit earlier. If I may say, we will take Andrew Ross now for the last question. To all the others we see in the queue, sorry, we are running out of time, but Chris and I will get back to you after the call to answer your questions separately. Aurelia, if you can let Andrew in, please.
Sure. Andrew Ross, your line is now open. Please go ahead.
Thank you. Can you hear me okay now?
Yes. There we go.
Sorry about that.
Yeah.
Thanks for taking me in.
Hi.
I've got two. First one on Woowa. Niklas, I think you said that the GMV in Q3 would've been EUR 6.2 billion had we included Woowa so we can back out that Woowa was EUR 2.8 billion. When I look through to your presentation, that looks like it's growing about 65%. A, is that number correct? B, can we assume that's a sensible run rate for the nine months? Anything you can give us as to how much Woowa is growing would be great. Then the second question is on Dmarts. Obviously, you're targeting 400 for this year, and I appreciate it's early to know what might happen next year, but could you give us a sense as to how many there might be by the end of next year? Thank you.
Thank you. Yes, I think your math sounds very good, very sound. I think that will be growth in Euro terms that you would refer to. I think if you look at Q1, it may have been a little bit more even. It sounds like reasonable assumptions that you made there. In terms of Dmart, given that we are very committed to when we say something that we get it right, I feel a little bit hesitant to share that. We're still working on that plan. It's still early days. We have to figure out in which area, where do we have the size and volume in order to justify a Dmart? Where can we drive it profitably? Where do we see the volume coming? How much volume can we drive and so on.
Therefore, I don't dare to say anything at this point in time more than the fact that we remain bullish and we are going to continue to grow it very fast. How fast is yet to be seen.
Thank you.
Thanks, Andrew. Many thanks everyone for your continued support and trust. We'll be working day and night to make sure we deliver on our commitments. Also a big thanks for the team doing an absolutely incredible job. I'm super grateful to be part of this incredible team. Thank you everyone.
Thank you everyone. Stay safe. Bye for now.