I now hand you over to Niklas Östberg, founder and CEO of Delivery Hero SE, who will lead you in this conference. Please go ahead, sir.
Good morning, everyone. Hope you are safe and healthy. Now looking forward to sharing our Q1 trading update. We had a fantastic development in Q1, which took a bit of a hit towards the end of the quarter. Despite some initial negative impact from COVID-19, we grew orders with 92%. Now we're back on track again, or even ahead of pre-COVID levels in almost all markets. Later on, we will speak more on how COVID-19 has impacted the way we operate and what measures we took for the safety of our customers, riders, restaurants, and employees. Now moving to the next slide. Never before has our vision been more real. We always deliver an amazing experience fast, easy, and to your door. We have always been very clear about our vision, and it starts becoming more visible in how we keep innovating.
We have accelerated investments outside of our core food delivery business to increase customer loyalty to our service and leverage our platform of customer merchants and riders. Before going into the financials, a quick recap on our strategic partnership with Woowa Brothers, which we signed on the 13th of December 2019. Woowa is, as you know, the largest online food delivery platform in South Korea, and the transaction is reinforcing our global leadership and strengthening our position in Asia. We are super excited about this partnership and can't wait for it to close. We do not expect that COVID-19 will impact the timeline of closing the transaction and remain to expect a closing of transaction during H2 this year. In the last month, we have been successfully conducting and preparing economic analysis and responding to KFTC's request for information. The numbers in this presentation do not include Woowa Brothers.
To the next slide. In Q1 2020, we delivered 239 million orders, resulting in order growth of 92% year-over-year on a like-to-like basis. This was despite initial strong negative impact from COVID-19, which totally impacted us with 9.3 million orders between 12th and 31st of March. Gross merchant value in Q1 2020 was up 58% on a constant currency basis to EUR 2.4 billion. Slightly higher on a reported basis. Including Woowa, this number would have been closer to around EUR 4.5 billion, with similar year-over-year trajectory. As I said, we do not report including Woowa at this point in time. All numbers excluding Woowa. Revenues continued to grow rapidly with 92% growth for the first quarter on a constant currency basis to EUR 515 million. Looking on a quarterly basis.
As you can see on this slide, our growth and pro forma basis is significant above that of other listed peers, despite significantly more scale, with exception, of course, on Meituan. We believe we can keep outgrowing everyone in the industry for many years to come. Looking back at our early promises, starting with growth. At IPO, we promised above 40% growth in the short and midterm. As you can remember, the IPO was happening in the mid of 2017, we're 2.5 years or almost three years down the track. As shown, we are continued strong order growth of 92%, as well as revenue growth of 92%. In the long term, we are more bullish about our trajectory than ever, have no new guidance here.
With Woowa's unique regional insight, we will also be able to specifically execute on the growth opportunity across Asia. On leadership, we keep winning market shares in every region against every competitor in the markets where we operate. In Q1 2020, we reached market leadership in 86% of the markets or of the countries where we are present. This was partially achieved by a secure leadership position in one additional market and the divestment of two non-leadership countries. We keep flexibility of additional investments of up to EUR 200 million, with the vast majority not yet spent, and is intending to use it opportunistically to extend leadership position where required.
As we're now making gross profit per order despite aggressive pricing, additional EUR 200 million gives us tremendous flexibility to invest very aggressively if need be. The transaction with Woowa also reinforces our position in Asia, and we are committed to invest in the Korean ecosystem and allow Woowa to expand its leadership position there. On technology and product. Here we are making fantastic progress to become a 3 third generation on-demand platform. We believe we are clearly ahead of our competitors here. We consider ourselves pioneers in delivery space. In Q1, we reached 52% own delivery share, and we have been using this as an advantage during the COVID-19. Delivery Hero will also support Woowa's expansion into new verticals. We will share global best practice, innovate together, and create beneficial for all stakeholders with more choice, better service, and more technology.
Last, in the profitability, we are a believer in driving profitability through scale and automation, we continue to target long-term EBIT margin of 5%-8% of GMV. Again, we have no urgency to get there, and we are fine if some markets are lower or loss-making for years to support achieving our first three pillars. As previously stated, post the transaction, over 70% of Delivery Hero's GMV comes from markets with profitability. Now moving to our business update. On the short side, we reached 500,000 contracted restaurants on our platform in January, making us the largest platform with the widest selection among listed peers or among outside of China. I think also among every peer outside of China. We added 50,000 restaurants only in the last three weeks of March as even more restaurants seeking online presence during COVID-19 pandemic.
Some restaurants are temporarily closed. Thanks to a hybrid delivery setup, more than 75% of restaurants are still active as of today. On speed, we have significantly improved operations to keep customers and riders and restaurants safe and gain trust in the ecosystem. At the same time, we reduced delivery times to below 28 minutes globally, and that is a 20% improvement. On new location or here label as seamless ordering, we accelerated the expansion into multi-vertical and added 1,500 partners only during the last week of March or the last three weeks of March. As of today, we have launched 104 Dmart stores in nine countries across MENA, Asia and Americas. Dmarts, for those who don't know, are small local warehouses that allows for delivery in less than 15 minutes, is the concept that we are currently building out.
They have historically often been referred to as delivery stores or cloud stores and sometimes also dark stores. I'll come back to this later. When it comes to COVID-19, we understand the important role we have in supporting our communities, restaurants, and delivery ecosystem. Here you see some of the global and local initiatives that were done around governments, communities, and customers. I think in interest of time, I think I'll leave it up for you to read. On the next slide, you see some initiatives for riders and restaurants and same here. I'll leave it up for you. I think these activities have not been without cost, but we are confident that return in form of trust is going to support us in the years to come.
Overall, we are very positive to actually take on for having made those costs during the COVID-19 outbreak. Moving on to the next slide. Far, we've been mainly a leader in the food delivery industry. Now we can properly say that we are pioneering in the quick commerce category. This is a category that has truly emerged during the COVID-19 crisis. I'd like to spend a moment explaining quick commerce. If you go back then to early 2000, traditional commerce was dominating all trades. Thanks to Amazon, e-commerce started to gain popularity. Now people didn't have to visit stores to get things delivered from mega warehouses. Deliveries have often then been done with delivery trucks and deliveries arriving two to three days after order, and in some cases, even next day. Price is key.
What we now see in the third-generation commerce, quick commerce, that is a quick commerce is delivery of product in under one hour. With our Dmart, even in 15 minutes. Quick commerce has fewer items, smaller baskets, and in particular suitable for one person household. Delivery is often done by two-wheelers and warehouses are small and centrally located, very different. The main difference than e-commerce is the simplicity of fewer items and the speed being more important than price. These are very early days, we expect that the quick commerce industry to start reaching the S-curve probably sometime this or next year, will reach EUR 56 billion in size in the markets that Delivery Hero covers and EUR 458 billion globally by end of 2030.
We cover this category both through partnership stores as well as our Dmart stores as mentioned earlier, and Dmart is still very small part of Delivery Hero, but it is growing exponentially. Today we have 104 stores in nine markets across MENA, Asia and Americas. Food will remain by far the largest category, but other verticals further complement our service offering to our customers. To be able to operate this category profitably, an enormous amount of work and technology has been developed. Everything from inventory management, rider operations, AI solutions for routing, mapping, dynamic pricing, area optimization, time estimates, forecasting, customer personalization. Yeah, only to mention a few. I believe our focus on delivering an amazing experience fast and easy to the door is the right focus and not in parallel trying to solve very different challenges of transportation, which in the future can itself be much larger industry.
Transportation is not for us. We stay very focused on delivering an amazing experience, fast and easy to the door, and that focus makes a lot of sense. Speaking on delivery. In Q1, we delivered 52% of overall orders. We now cover approximately 530 cities globally. Operational improvements and new contactless delivery led to global reduction in delivery time to now being less than 28 minutes on average. We have enhanced utilization of riders by 22% year-over-year. Even more importantly, we have significantly improved our gross profit contribution for the group, and it is soon to reach the target where it is on parity with that of marketplace. Here we are proving what we always said, that if you operate very efficiently and you keep focus, and we have been doing that for five years, this can be a profitable business.
Now over to Emmanuel for the financials. Emmanuel.
Well, thank you, Niklas. Good morning, ladies and gentlemen, and welcome to the first earnings update of 2020. In this first quarter, the world faced a so far unknown situation in recent time with COVID-19, with unprecedented consequences, in terms of impact and reorganization. Our employees and structure have proven how resilient, flexible, but also creative and inventive they are to serve our customers, to help our partners, and also to protect our riders as well as our employers. This is a real stress test for all of us and obviously also for Delivery Hero. Quite frankly, we are managing this crisis in a very good manner. Despite the impact of the coronavirus, the lockdown, and other curfews that Niklas mentioned before, the company managed to continue its strong growth trajectory.
Our reporting growth rates are the result of our tremendous efforts, but also our aim to invest into what we see as the extent of the success of our company, our vision to provide an amazing takeaway experience. Given the exceptional situation we've been living in the last three months, I'm really proud to see how Delivery Hero could maintain high customers acquisition levels while supporting governments, also local communities, our customers, the restaurant throughout the COVID-19 crisis. Continuing into 2020, we are in a comfortable position to be able to have a high growth rate while making positive our unit economics on every single order executed and continuing to improve it. Now let's start with our group financials.
First, Niklas mentioned it, first, please note that the strategic partnership with Woowa is not reflected in any of the figures until closing of the transaction, which we expect to take place second half of the year 2020. The group orders increased by 92% year-on-year in Q1 2020 to 239 million, despite a 9 million negative effect on orders after mid-March driven by COVID-19. If adjusted for all the investments and acquisitions, the group has grown by 89% year-on-year on like-to-like basis. Our revenues continue to grow at an outstanding pace with year-on-year growth of over 92% on a constant currency basis to EUR 550 million. Similar to the previous quarter, our revenues on the group level have been impacted by the application of the so-called IAS 29, or the impaired inflation accounting for Argentinian operations.
I will come back later on in our Americas section. The positive impact on acquisitions of the current situation is expected to extend the market opportunity and also to be beneficial for the online food delivery, as well as all sorts of fast delivery service like our quick commerce in the long term. On-delivery orders increased to 52% of the total orders in Q1 2020, driven by increased customer demand and city expansion across all markets. This growth is supported by positive unique economics on group level and improving unique economics for on-delivery orders across all segments. As we announced during the previous quarter updates, we will now be reporting Integrated Verticals as our new segments following the platform business reporting.
I would like to specify upfront that orders are not double counted for platform business and their integrated verticals, that revenues for integrated verticals are defined as GMV for the platform business, and GMV for integrated verticals include both the revenues but also the VAT. Given the exceptional circumstances, COVID-19 update will be shown for each reported segment, starting now with the group update on the next page. The impact from the COVID-19 pandemic differs from market to market and also has evolved rapidly. In general, we note a steady growth of acquisitions throughout this COVID-19, driven by expansion of the customer base beyond typical demographics. We see orders now being 11% lower than March 11th, 2020, and almost back to pre-COVID levels, and on a good trajectory. We can also classify order growth into two phases as shown on both graphs.
The phase I, where global governance reacting to COVID-19 with different kind of measures, some with country lockdowns and some others with curfews with limited food delivery permission. In phase II, we're almost back to pre-COVID levels. Overall, we see a positive effect from COVID-19, except in markets with strong lockdowns and curfews. We also see average basket size increase, netting out orders loyalty impact. Also, we see that most governments have slowly lifted restrictions, and today, only a handful of countries are still under strict curfews, limiting food delivery to certain hours. This is the case of KSA or Saudi Arabia, Kuwait, Turkey, Jordan, Pakistan, and Bangladesh. What we see also in the second phase, we see that the safety measures have been applied and also communicated.
We see that local communities have been supported through partnerships, and also that we target and we introduce efficient restaurant acquisition. That's the point that we see during the second phase. Let's move to the performance of the four operating segments for platform business. I'd like to start with the biggest segment, Asia. Asia has continued to be a focus area of growth for us in Q1 2020. As mentioned in the previous earnings update, we clearly see the impact of previous investment to improve our city coverage, customer experience, through faster and more reliable delivery, as well as a greater restaurant selection. As a consequence, we see a record in order acceleration of 261% in Q1 2020 to 110 million in orders generated on our platforms. This is circa four times the year-on-year growth that we achieved in Q1 2019, a year ago.
This growth is mainly driven by early-stage markets in APAC, where we see growth of double digits in some markets. In addition, as Niklas also mentioned, the strategic partnership with BubBa is expected to help us to expand our footprint in the region. Asia's GMV increased substantially by 126% on constant currency to EUR 939 million. The revenues reached EUR 201 million for Q1 2020, growing at 198% compared to Q1 2019 on adjusted constant currency basis. The stronger revenue growth compared to GMV was mainly due to the increase of our on-delivery orders, reaching 70% of total orders. We are further accelerating the rollout of on-delivery by focusing on customer experience and also decreasing delivery times. Beside the Asian food delivery business, we have seen also growth in new vertical, and 16 Dmarts have been successfully launched in Singapore and Taiwan.
Now let's move to the COVID-19 slides for Asia. In Asia, we've seen a slight acceleration of acquisition in a few markets during the peak of the global pandemic, while Pakistan and Bangladesh introduced partial curfews, including food delivery. As a consequence, we see pre-COVID-19 levels for less impacted markets and recovery trend for Bangladesh and Pakistan, with orders now being 11% higher than March 11, 2020, for the whole segment. This resilient development took place as Asian governments were reacting in a very decisive and fast manner to the pandemic. Now I'd like to move on with our next segment, MENA. In Q1 2020, 85 million orders were generated, and this is representing a growth of 31% year-over-year. Those figures are representing the significant order loss that we note during the COVID-19.
While we also operate strong EBITDA in the first two months of the quarter, the crisis or COVID-19 has impacted our profitability during March as some countries have applied strong curfews, and that had not been repealed in some cases yet. The GMV for MENA grew by 28% year-over-year in Q1 to EUR 957 million on constant currency basis, and with a 25% growth even higher on the reported currency basis. Continued revenue progression with year-over-year growth of 38% in Q1 and on currency basis to EUR 202 million. Our own delivery business is ramped up at an accelerating pace and reach now 35% of total orders, compared to 27% of total orders in Q1 last year. MENA platform business adjusted EBITDA is expected to remain higher in 2020 versus 2019, and this despite a negative impact up to EUR 50 million from COVID-19 curfews.
Outside the platform business, the MENA segment successfully invested into Dmarts and virtual restaurants. We will refer to after as their integrated vertical. In MENA today, we operate 85 Dmarts across Turkey, Kuwait, Saudi, and UAE. Let's move to the next slide, and let's look at the COVID-19 impact for this segment. During the COVID-19 emergency, acquisition has seen a strong growth in countries not implementing curfews. Due to the prominent government restriction implemented locally, such as 24 hours curfews in KSA, we registered a decrease of 48% in orders since March 11. Similar to acquisitions, orders are showing sign of recovery. For example, Egypt is starting releasing curfews restrictions, or Saudi allowing deliveries under special permission, Kuwait allowing deliveries after sunset.
Nevertheless, curfews and significant restrictions are still in place for several markets, but also safety measures have been successfully introduced by us, like the contactless delivery, which is, for example, the case at HungerStation, or we also support local entities by donating meals to the most vulnerable and medical staff. Also here, in MENA, we focus on restaurant acquisition with our targeted sales action. Now let's move to our next segment, Europe. Europe segment shows continuously strong growth compared to our peers. In Europe, we generate 25 million orders in Q1 2020. This is a growth of 33% year-on-year. In other words, we are outgrowing by far our European public listed competitors, with Just Eat growing orders by just 6% in Q1 2020, and Takeaway pro forma growth being at 16% for the same quarter.
Europe GMV grew by 40% to EUR 321 million, while the revenues grew by 58% year-on-year on constant currency basis, EUR 58 million. During the quarter, there was an increase of customer acquisitions in more markets, especially in the Nordics, currently growing faster than pre-crisis levels. Our own delivery orders are now at 19% of the total orders. Let's have now a quick look at the COVID-19 implication for Europe. With the consideration of this crisis, Europe saw significant growth of acquisitions in Northern and Eastern Europe as new customer groups are trying food delivery services during country lockdown. After an initial drop in orders and acquisitions, even Greece and Balkans experienced a sharp increase in acquisitions during the last weeks. There's also acceleration for Nordics and Eastern Europe, while the rest of Europe is on track to reach a pre-COVID-19 level.
As we see governments lifting restrictions, like this is the case in Hungary, or we also introduce safety measures, like for our Foodpanda Romania activities, or we support the local communities, like also here, donating medical equipment supported by iFood, and the customers in Greece. Also finally, also to foster the target restaurant acquisitions, starting, for example, free delivery for home zone areas co-sponsored by vendors. This is what we do right now in Nordics. Now I'd like to finish with Americas as our platform segment. Americas generated 19 million orders in Q1 2020. This represents a year-on-year growth of 79% compared to the same period in 2019, and a significant acceleration in Q1 despite slight negative impact of COVID in March.
Here, 79% year-on-year growth is a significant acceleration from previous quarters. Still, we continue to operate in a very early-stage market, and we expect this growth acceleration to continue. The GMV grew by 42% in our reporting currency, and our custom currency GMV growth has been 48%, amounting to EUR 162 million. The revenues grew by 103% on a custom currency basis and amounted EUR 38 million, boosted by the investment in our own delivery capacity as well as the further rollout of our multi-vertical offering, including groceries and also other on-demand items. Own delivery orders are now at 62% of total orders in Americas. Moreover, as of today, three Dmarts have been launched in Argentina, Chile, and Uruguay. Obviously, FX headwinds for the region are impacting our results in Europe significantly.
Further revenues as well as GMV for Americas, I mentioned before, have been impacted by the application of the IAS 29 that came into action since September 2018. The impact of considering Argentina as a hyperinflationary country was negative of EUR 370,000 in Q1 2020 regarding revenues, but EUR -1.7 million in terms of GMV for the same quarter. Let's look at the COVID-19 page for Americas. We see strong acquisitions, except in countries imposing stricter COVID-19 measures. Order decreased mid of March as governments start to implementing COVID-19 measures. Recently, order have been stabilizing, trending to pre-COVID-19 levels and beyond with a total increase of 25% since March 11. The reason for it is that we see government lifting restrictions, for example, in Panama or the safety measures have also here been applied and communicated.
This is the case for contactless options via our app, like for the case in Foodora Canada, as well as local communities have been supported through partnerships like social services for the community in Chile. Finally, we undertake here also a very targeted and efficient restaurant acquisition. Targeting local key accounts that churned in the past to win them back. That was one of the key focus of Deliverect during this quarter. We continue to do so, obviously. Now, I'd like to turn over to our new segment, the integrated verticals. As per Q1 2020, we introduced for the first time our fifth segment, the integrated verticals. The segment captures the activities that we are operating as a principal versus Foodplatform, where we are acting as an agent.
I.e., where we are in full ownership of virtual restaurant or Dmart, we refer to as integrated vertical. While integrated vertical business still makes up to a small portion of the overall business, we expect them to grow over time with fundamentally different economics to our platform business, and that's why we separate them from the other segments. In Q1 2020, the segment produced three million orders, and the GMV reached 18 million orders while revenue were at 17 million orders. Looking at the March data results, the increase of Dmart's customer acquisition, an increase of 218% month-on-month, and order growth, an increase of 28% month-on-month, continued throughout COVID-19 pandemic as customers prefer to order from home during times of social distancing. These acquisitions, all acquisitions that we've seen for integrated verticals occur at close to zero CAC.
No marketing spend to acquire these customers. We also recently noticed a substantial increase in AOV as these customers become more familiar with using our services. Now I like to continue and taking a look at our current cash position. On this slide, we highlight our cash position pre and post the Ruza transaction, which again, we expect to close in the second half of 2020. We end the first quarter with a net cash and liquid assets position of EUR 2.8 billion, and this is excluding the so-called restaurant cash. The EUR 2.8 billion includes the proceeds of the amount of EUR 2.3 billion from the convertible bonds issuance and also the equity offering that we raised in January 2020.
After earmarking the EUR 1.7 billion that is expected to be paid for the cash component of the Ruza transaction, we will then end up Q1 2020 with a net cash and liquid asset position of more than EUR 1.1 billion. This will be used for general corporate purposes and also potential M&A activities. We don't expect any major impact from COVID-19 on this cash position, we do believe that a strong balance sheet will be a competitive advantage in terms of tougher funding. Let's move to the next slide and our equity value bridge. In terms of impact of the transaction on our equity valuation, it's helpful to look at our enterprise and also to equity value bridge in more detail.
If you start with our enterprise value, you would add the cash and liquid assets at per March, in the amount of EUR 0.1 million, as I just described the slide before. Also add the latest portfolio valuation of other minority investment, in the amount of EUR 728 million of which Rappi and Glovo being the largest. This results in an increase of EUR 1.8 billion of the equity value compared to the enterprise value. Now let's move to the guidance for 2020. In terms of 2020, we maintain our previously set guidance and continue to expect full year 2020 revenues in the range of between EUR 2.4 billion-EUR 2.6 billion, with an adjusted EBITDA guidance for the group of being -14% and -18% as a percentage of revenue.
This guidance is excluding additional investment of up to EUR 200 million, with the majority not spent yet, and that we intend to utilize to extend our leadership in selecting markets where required. We are confident that 2020 will be a crucial year for consolidation, and therefore we are even more pleased having the flexibility to act in an offensive manner. COVID-19 related costs will be absorbed in our group guidance, including the negative impact of EUR 50 million on adjusted EBITDA experienced in MENA platform business due to the COVID-19 curfews. While on a group level, we continue to invest, the direction is clear for us. The EBITDA margin from here is clearly improving as we grow in scale, and we can lever on improving contribution margin. Furthermore, we have proven to deliver a path to profitability for two of our platform segments, Europe and MENA.
Europe expects to run at breakeven during this year and MENA adjusted EBITDA to expect even higher in 2020 than 2019. Now I hand over to Niklas to wrap up this presentation.
Thanks, Manuel. To wrap up, 93% year-on-year growth during Q1, despite a temporary dip due to some strict curfews. Increased leadership positions to 86% of our countries. We rolled out third generation platform, including grocery, Dmarts, and virtual restaurants. We have been helping local communities throughout the COVID-19 crisis. We reduced delivery times to under 28 minutes on average. Last, now more than 500,000 contract restaurants on our platform. With that, I'd like to thank you again for your tremendous support. I think this will be another fantastic year for us, and now opening up for questions.
Ladies and gentlemen, we will now begin our question- and-a nswer session. If you have a question for our speakers, please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question has answered before it is your turn to speak, you can dial zero two to cancel your question. If you are using speaker equipment today, please mute the handset before making your selection. As a courtesy to other participants, please limit the number of questions you ask to two at a time. One moment please for the first question. The first question received is from Marcus Diebel of J.P. Morgan. Your line is now open, sir. Please go ahead.
Yeah. Hi, everyone. Niklas, I have one question on competition. If you can elaborate a bit more on. In terms of the EUR 200 million spend, how is that related to competition? Could you tell us a little bit more how you're thinking about when and if to spend it, what your thoughts are here in this regard? I guess we all read the comments from Uber and other players in terms of their profitability aspirations. Have you seen any major funding issues at some of your competitors? Do you think that funding is coming down, therefore you have an even better position? Again, how does this square to your thinking how much to spend in this context? Thank you.
Right. While we are giving commitments that we will win the markets where we operate, and we have managed to achieve that in almost all markets. We now like to make sure that we have the firepower to keep pushing on this path. Additionally, we see also good returns on our investments, and we have been growing several times more efficient than our competitors, as you can also see from the financials of some of them. We know that they cannot burn cash forever. We are ready to attack when the time is right. In essence, and we haven't used or only used smaller portion of this. We still keep it at hand. I think we'll deploy a significant portion of it, as I think that we'll have a lot of opportunities, so probably more opportunistically than defensively.
We also want to make sure that we have enough firepower to take any fight. Luckily, we don't have that many fights. We might speak about three, four, five, six markets. EUR 200 million is a substantial amount that we can deploy if need be. In terms of the competitors, I'm sure they will probably get funding. I think they've had a little bit harder time lately. We've also heard or seen some players struggling a little bit there. That probably does change a little bit, but I think the largest change is not if people have capital or not, it's more the sentiment that you have to prove efficiencies. I think that is a mantra that I had for the last few years to operate efficiently such that every euro we spend goes into growth.
While I think some of the private players have just spent money without looking at efficiencies, and therefore they keep on burning money despite cutting down on their aggressiveness. Therefore, we don't really see them as very threatening at this point in time. We expect they will get more efficient, and we'll make sure that we have the firepower to fight it when that day comes.
Okay, perfect.
Thanks.
The next question received is from Giles Thorne of Jefferies. Your line is now open, sir. Please go ahead.
Thank you. The first question, I guess is an extension of the previous question around access to capital for your competition. I wanted to come at it from the angle of marketing efficiency. What are you seeing happen to your marketing efficiency or customer acquisition costs? If you could focus your comments on those regions where you've been facing off against SoftBank-backed platforms, that'd be really useful, so I guess Asia and Americas. Any change in your marketing efficiency and customer acquisition costs in 2020? Second question, the multivertical and the greater and greater push into grocery. There are still voices out there that say it makes no sense and shouldn't be done. It feels to me that multivertical and grocery is going to be a greater and greater driver of competitive dynamics as we move forward. I'd just be interested in your view.
Can a multivertical proposition influence the path to market leadership? Thank you.
Cool. Yes, I think there has been a clear change. I think also the fact that we have improved our economics, as you saw in our delivery economics on one of the slides, and this was particular in Asia segment. We have improved our gross profit, which means that we are improving our lifetime values. When we look at our CAC versus lifetime values, we feel very confident. We have probably seen a little bit of a pullback, but we have paid a little bit more attention on where we have our returns and thus making sure that we make investments. Right now it looks very good. In particular than since mid of March or end of March, we have seen very positive CAC as many users have come also for free, to be honest.
We have at least the fact we have a strong awareness in the market also means that we get a significant portion free traffic and free users during this crisis. On the multivertical. I've heard that it doesn't make sense. I've heard also that logistic doesn't make sense, and I think e-commerce also heard that it doesn't make sense. Still have an Amazon worth a trillion. I think over and over, you will hear skepticism, and that's okay. We will just have to prove that we can make economics. Having said that, it's not easy to make economics in this business. It's also not easy to make economics on delivery. It requires years of operating this, and the same with the multi-vertical. It's very tough. I think we have found ways, and that's always the way we look at it.
We'll always look at it from a consumer point of view. What do the consumer want? Then the question is, how do we price it, and how do we make it work? I think here, I think we have good developments, and we are of course, very satisfied with the current development there. We are very happy with the dark stores that we've been launching. I do think that our focus, and of course, every company have their focus, and I think that's the right thing. We have our focus to deliver an amazing experience, fast and easy to the door. We think that is a large enough focus, but it is a focus. I think some players have a focus of doing everything. I think that's very tough, and I think they are not very synergetic to do it, driving people and delivering items.
Therefore, we think that it's a way too big focus, and then other players are focusing all on food. Everyone is taking their own approach. Our belief is that our vision is what makes sense for us, and we believe that our customers are going to value us more for that.
Thank you, Niklas. Just to push you on that last point. If the utility of a marketplace defines the competitive outcome in any given country, do you think a traditional food-focused marketplace can beat-?
Yeah
or win out against a multi-vertical-
Yeah
marketplace that also does hot food or vice versa?
I think it, yeah.
Do they just coexist?
I think it can. I know there's always when you're trying new things, you have to have a very strong team and strong operation to manage multi areas, and it does drive extra complexity. I think it can in some markets, groceries and other items might not be large enough to justify it, and a food player can focus on a slightly different customer segment and still make a good return on profits. I think it can both coexist, and it can even beat a multi-vertical approach. I'd rather have a singular focus on food than a distracted focus on a lot of things. Luckily, I think that we can handle the focus, and we are able to, and we will have a lot of synergies there.
I also think that we have enough scale to operate both these verticals or these verticals, while many other players will not have the scale to operate this. I think there is also a time and a size and a scale in order to do this effectively and profitably. We have that scale and size, and many others don't have that size, and therefore, I also think it will be tough for them to do multi-vertical.
Thank you very much.
Bye.
The next question received is from Joe Barnet-Lamb of Credit Suisse. Your line is now open, please go ahead.
Thank you very much for taking my questions, guys. The first area of questioning is around the gross margins of marketplace versus logistics. Can you talk a little bit about what drove the significant step change in logistics profitability or margin in the quarter? I think you touched on Asia, but any more color you could give around that? As a follow-up to that, how long will it take to get to parity logistics with marketplace, and what happens when you get there? Will you look to reinvest any excess profitability from logistics, or could we see conceivably logistics margins going above marketplace? That's question area number one. Question area number two, as a result of COVID, you brought in measures to aid restaurants, including delivery fees, and I think in some areas, even lower commission rates. Can you help us understand the cost of that?
How and when you get back to a normal fee-paying environment. Thank you.
Thanks. Yeah. I'll cover a little bit on the gross profit. We've always had the approach that we price things at where we think that we can make the profit contribution parity over a foreseeable future. I used the phrasing before. Foreseeable for us was the six, nine months down the track that we saw that we clearly have initiatives in the pipeline that can drive us there. That's why we front-loaded some of our aggressive affordability push, last year in particular, because we saw that we can get more efficient on our drive logistics and so on. That's why I've seen a big improvement now in Q1, because we took our affordability to that level, and we have kept it at that level while we have actually improved our efficiencies than after. In the past, we changed towards efficiency but also reduced the pricing.
That's why you never saw that improvement in gross profitability that effectively. That's basically what happened. When we reach then that parity. First of all, we still have a lot of work to get there. There's a small difference maybe, but we speak about every single cent matters here. We speak about even fractions of cents when we work on our improvements and efficiencies. Even getting to parity is still going to be some work. We are confident that we get there. If we overshoot, then we probably price too high, and we should have taken down pricing and maybe we'll take down pricing even further, to making sure that we keep that parity because that's where we want to be.
We don't want to make excessive profits on logistics, but we want to make similar profit on logistics as when we've done to logistics. That's the plan. In terms of the COVID and the cost there. Most of the costs have been one-off costs when they are more directly related to COVID. We are doing a giving back thing, which is slightly larger during Ramadan to have a slight cut in commission during one month. That is more of a Ramadan giving back to the community, showing that we're building on our trust that we have in the region and the relationship we have there. That's just a one-month off cost there. Of course, we have more COVID costs related to, that we have lower order levels and we make a significant profit contribution per order.
We are taking a significant loss indirectly, as long as order levels have not returned to normal. The last few days have been very good, especially since we started Ramadan. We hope, of course, that the curfews will be over when we get out of Ramadan. This we cannot plan on. We will have to see when we get there, and that's why we are putting EUR 50 million expected hit on MENA to be on the safe side there.
Thanks very much, Niklas. Maybe one very brief follow-up, if that's okay. With regards setting that profitability level of logistics equal to marketplace, you spoke about the affordability you sort of brought in. You stand now, knowing more than you did 12 months ago, do you think you did set that affordability at the right level, or do you think it's conceivable that in the next six, 12, 18 months, you actually bring in another round of affordability, thus driving growth up because it is trending above marketplace profitability?
Right. I do not expect that there will be further affordability cuts, or at least not on a global level that could be visible. I think we have also taken it almost as far as we can take it, to be honest. There's a lot of free delivery, there is a lot of low minimum order values, a lot of low delivery fees. I don't even know if we can take it much lower. It would really just be marginal that is even possible to do. I do not expect that there will be anything more that could even be done, even if we would want to. From this level, we should be fine. Yeah. Yeah.
Excellent. Thanks very much. Appreciate it.
Okay, thank you.
The next question we receive is from Andrew Porteous of HSBC. Your line is now open, so please go ahead.
Hi, guys. A couple from me. First of all, a quick one around MENA. Just trying to understand what's assumed within that EUR 50 million impact on MENA this year. Presumably you can't keep going at -50% orders for too long a period. Just trying to understand what sort of recovery you're assuming there when you're calculating that impact. The second, just on the impact on the economics of the grocery side of the business really on dark stores. Could you just talk about how the economics stack up in terms of basket size, gross margin, delivery fees, et cetera, just to help us understand it? I can understand why people are skeptical given what you sort of see from most grocery businesses. Just trying to see why you might take a different view on that given the economics that you see from your side.
Cool. Emmanuel, do you want to cover the first?
Absolutely. Our expectations on MENA, first, as Niklas said, we've been cautious because the visibility that we have with MENA is not exactly the same that we have for the other segments. I mean, the other segments we've seen the restriction lifted by the government. While in MENA, we are still experiencing curfews and lockdown by the government. It's quite difficult, combined with the Ramadan, to see what will be the impact for the future. The EUR -50 million EBITDA is mainly coming from a reduction of orders, clearly. You've seen the impact of 48% on Q1 already since 11th of March. That we were assuming that what could be the worst-case scenario. That's why we're talking about up to EUR 50 million negative EBITDA. We're assuming that Q2 will be very special because we have a combination of COVID-19 plus Ramadan starting.
We do have some costs related to our efforts. We make donation. We also increase our operations to support the onboarding of the restaurants, making sure that we onboard them faster. It have also some costs on the riders because we recruit. Basically, this reduction of the EBITDA as we are planning today or we are forecasting today is clearly mainly linked to the reduction of the orders. When is the normality kicking back? When do we go back to normality? There, this is like an assumption. Probably Q4, we will see an improvement, but that we were pricing in the evolution that we should see today. As I said, the visibility on MENA is quite different from what we have for the other segments, and we've been cautious. Do you want to continue on Dmart, Niklas?
Yeah. On the groceries. Yes. Let's do the Dmart. If you look at a grocery, when you are the purchaser of principal of items, and you, depending on which item you choose and the selections and so on, you can have margins anywhere between 20%-50% on your items. It's fairly similar to the fees that we have when we deliver food. That's where we make the margin. Of course, we have some cost associated to it, but we also have some less cost related to it. Logistics is shorter distances and the picking can also be covered through a small delivery fee or so on. The simple way of looking at it is that the margin we get from a product is equivalent of the margins that we get from a restaurant when we do service.
Of course, we have to adjust with delivery fee and other items to making sure that we cover the other potential items and item cost.
I think if I may add.
When you speak about.
Oh, sorry.
If you look at the groceries, then it's harder. Here, I think it's a more difficult job to get economics when there is someone in between or a grocery store who also needs to make margin on the products. They're also here, and they're working directly with the CPGs. You also have a possibility to make an additional revenue there. Manuel.
Just a quick thought. What was the split between perishable and non-perishable grocery within Dmart?
We do not disclose. We have both.
I just wanted to comment on the sort of fixed cost that we may have at Dmart compared to groceries. Obviously, our stores are smaller, so we can optimize on the cost structure, and it's had an impact on the margin that we can generate from Dmart, which are supposed to be better than the groceries one.
Okay. Thank you, guys.
Hey, thanks.
And the next-
Think we're running a little bit short on time. Maybe one or two.
The next one is from Andrew Ross of Barclays. Your line is now open, so please go ahead.
Yeah. Morning, everyone. Thanks for squeezing me in. Just two topics to touch on. First one to follow up on the Dmarts. I think you're targeting around 400 to the end of this year. Maybe you could just confirm that. Kind of into 2021, how should we think about the ramp effect? Is there anything you can share with us in terms of kind of how many stores per population you think you need in the market? Any kind of work you've done on that would be helpful. I guess as an extension to that, how much negative EBITDA is there in the guidance related to these stores this year? Thanks.
Well, on Dmart.
Yeah.
Sorry.
Please.
No, go ahead.
I think on Dmart, yes, the ambitious target is to get to 400. It's going to be a lot of work. It's not easy, and it's a very aggressive ramp up, and we're doing our best and hope that we get there. In terms of 2021, I do not dare to speak out on that now. It depends very much on the order density that we can generate because we don't want to open Dmart when we don't have enough order density. We know roughly how many customers we need in a certain area in order to justify having a Dmart. Of course, if we see that the cohorts and behavior and that is changing during the year, then of course we can build even more Dmarts to have even closer proximity to the customer, making even better economics on it.
It's really around driving scale per Dmart store. I do not know yet how much scale we can drive in order to even having a closer proximity there. Unfortunately, I won't be able to answer that, but, we will have the best coverage of Dmart stores in all markets that operate, that is for sure.
Just in terms of the EBITDA contribution this year?
I see you haven't given guidance on the EBITDA contribution. I think we gave in the last update an approximate CapEx as well as OpEx for ramping up those stores. We have a similar view today. Emmanuel, anything you can share there what we should expect?
No, you're right. We didn't disclose the EBITDA contribution. In terms of CapEx, we mentioned around EUR 3 million for this year for global CapEx. We stick to the 400 Dmarts that we want to launch this year, 2020.
Great. Thanks.
Thanks.
The last question for today is from Hubert Gino of UBS. Your line is now open, so please go ahead.
Great. Thank you, and thank you for taking my question. Just one, given the time constraints on if you could give us a comment around the cash balance and the bridge between the EUR 1.4 billion number that was given in, I think in February and the EUR 1.1 billion now would be great. Thank you.
I mean, like the bridge that we saw today is the cash flow at the end of March, excluding restaurant money and including our assets like our Takeaway share that we still own. This is what we're presenting today. I must say the bridge, I don't have it on top of my head from EUR 1.4 billion-EUR 1.1 billion. I will have to verify this information.
Okay, great. Thanks.
Hey. Again, I'd like to thank everyone for your trust and support. I'd also like to use the opportunity to thank the Delivery Hero team. I really couldn't be more proud of what you have delivered over the last two months. I know it's been incredibly hard, but the world has never needed us more than now. Thank you very much, and stay safe, stay healthy.
Yeah. Thank you everyone. Stay safe. Talk to you soon.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.