Welcome and thank you for joining Delivery Hero's Q2 2021 Trading Update. Call, I would now like to turn the conference over to Daniel Fatiastani. Please go ahead.
Thank you, and good afternoon, everyone. Thank you for joining this call today, we trust that you have all received the release and the slide deck on our Q2 trading update that we published this morning and that we have also sent out by e mail. These documents are of course also available on our IR website. As always, Niklas and Emmanuel will summarize the most important aspects of today's release in the next 20, maybe 30 minutes. And after that, we are looking forward to answering any questions you might have.
Before I hand the call over, let me quickly mention that this is my last trading update call and almost last day here, I will be leading Delivery Hero. I would like to thank you all very much for the trust and support in the past and hope to see you again somewhere call, I am happy to be handing over the IR lead to Christoph Fast, to whom many of you have already spoken. So I'm happy to know that you will be in very good hands. With that and without further ado, let me pass the words to Niklas.
Okay there, everyone, and hope you are doing well. Excited to share our Q2 with you. We'll do it fast to give a space for Q and A shortly then. But first, let's reiterate our vision, which is to always deliver an amazing experience to our customers. We do this with traditional food delivery, but of course also in the significantly growing quick commercial space.
We are today a true delivery super app. We deliver whatever you want. You already know the premises that we have laid out in the first or in the past, and that haven't changed. So that is then also summarized on Chart 3, and I think we can move forward here. But before going into Q2, let me recap that we continue to present numbers on a pro form a basis as we have done already at our Q1 trading update in April.
This means that we exclude the DeliveryCare Korea for the full year and include VUWA for the entire year. Let's now look at some of the main developments since our last trading update on Chart 6 here. I already mentioned the tremendous growth we have achieved again this quarter and this despite very limited COVID impact. Quite importantly, we have scaled up our OD in South Korea quite substantially with the launch of BEAMIN-one in June. I'll give you more detailed update on this later.
We have continued to press forward with the expansion of our Demarts offering. We added another 85 or 84 stores in Q2, and we have or had 687 active stores at the end of June, which is now far above 700. In Germany, we had a proper launch of our business there with Foodpanda 2 days ago. We, of course, remain very excited to building our service out here. Already in late May, we have adjusted our footprint by selling our Balkan operations in Glovo or to Glovo for a total concentration of €170,000,000 specifically, the sale comprises of our operation in Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Romania and Serbia, we think Glovo is well placed to continue investing into improved customer experience, long term sustainable operation and further build out the businesses locally.
And given our stake here in Glovo, we are indirectly going to benefit from the upside that we think Glovo we generate post this transaction. Finally, moving away from direct financials, we have also kept the momentum up in the ESG part of our business, we have initiated a sustainable packaging project with an objective to reduce plastic waste as well as carbon emission, we are going to provide local restaurants with eco friendly packaging solutions at a comparative cost. In our first step until end of the year, we aim to deploy 10,000,000 units of sustainable packaging in 8 selected countries. After this, we want to expand the program to additional markets and thereby reinforce our commitment to sustainability. And with that, I'll hand over to Emmanuel for the financials of the Q2.
Emmanuel?
Thanks, Niklas. So good afternoon also from my side. As Niklas already mentioned, the Q2 have been another tremendously successful quarter for us. We recorded 730,000,000 orders, which correspond to an increase of 79% year on year and over 10% quarter on quarter. The GMV or gross management value advanced at by almost the same pace with a 74% reached €8,400,000,000 And finally, total segment revenue in the quarter, out by at €1,500,000,000 which compared to €800,000,000 in the same quarter last year and therefore an increase of 105% in reporting currency and even 115% year on year in constant currency.
I already mentioned most of the second quarter numbers for the group, but let me adds a bit of details on Chart 8. So we reached an on delivery share of 50% compared to 46 on a pro form a basis a year ago. And the modest increase stems from the fact that due to the inclusion of BUBA in the numbers, there is strictly lower OD share. That's result in a lower growth on the group level. This should reaccelerate with the rollout of the OD in South Korea, but we will cover this separately in a moment.
The Bvlgari Group, although all, showed continued healthy growth in H1, with orders increasing by 66 percent year on year and the GMV by almost the same magnitude at 68% and revenues rising up at the 76% compared to the same period last year. We will publish our full set of numbers in H1 reporting 2 weeks from now, But on primarily in basis, the H1 2021 adjusted EBITDA to GMV, the margins stood at minus 2.1%, which shows the very positive development from negative 3.6% in H1 last year in 2020. So now turning to chart number 9, our largest segment, Asia. So please remember that the sizable group operations are included in this segment. And despite the fact that the Korean business is growing a little bit less than some other of the countries in Asia, we have again achieved significant growth in the region.
The orders are up by 71% year on year. The GMV is up by 68% and the segment revenue are 48 84% higher than in Q2 2020 on reported currency and even higher on constant currency. Overall, a significantly higher growth by the ones reported by our peers in the region, which means that we are gaining market share. We'll give you an update on the rollout of the Audi business in Korea in a moment on the next slide. But now let's move to MENA.
So now looking quickly at Lena on the chart number 10, as you remember this segment saw order numbers going down by 6% in the Q2 of last year due to the COVID related carfews and restrictions. In that sense, the segment we have a new lease account this quarter. In addition to it having returned to its normal growth trajectory already before, we're now showing very distant growth numbers. The orders were 122 percent above the prior year number at 148,000,000. The GMV on the reporting business increased by 97%.
And adjusting for FX effects, however, the increase was almost the same level as the order at 124%. And also the segment revenue came in strong with an increase of 117% on reporting basis and even 142% adjusted on FX effects. Now going to Europe. The orders continue to grow quite significantly with 63% year on year. We've seen a slight deceleration as restrictions fell away, but July's growth was still very healthy with 50% year on year.
The growth of GMV and segment revenue was even higher at 71% and 96%, respectively, with a little less in cost and currency. Now let's move to Americas, and I will keep my comments very brief on Slide 12, which summarize the developments in Latin America. So we're very happy to see the strong growth that we have seen in the recent quarters continue. The orders went up by 77% year on year. GMV increased by 86% and segment revenue growth was again above 100% at 110%.
Eulisha in LatAm or in Americas already high in the region and continue to climb further to 86%. Finally, on the next slide, Slide 13, you will find the numbers of the integrated vertical segments. As we continue to rollout our new demarks, our growth continues to be extremely strong. We recorded 21,000,000 orders this quarter, making us the leader in the segment. And we achieved growth of 2 49% year on year.
G and B and the segment revenues increased by similar magnitude with our 254% and 237%. Already today, the segment contributes to 15 presentation, we expect to be able to expand on the total segment revenue. And while of course, revenues are much higher in this segment due to the different revenue recognition compared to the platform business, we think that this is still a remarkable achievement. We also generated about a equal amount of orders in our 3rd party stores, But those are not part of the Integrated Verticals segment, as you know. On the contribution margin on the next slide, we are also publishing an update here I will with the contribution margin chart.
And as we know that this is of high interest to you. On this chart, you will find the figures of the margin before butcher costs. All segments continue to be positive in positive territory on that basis. And what is again important to mention is that the margins in this chart does not include the non commission revenue or the that we are generating. So in H1, 2021, for example, we reached 1.6% of GMV, which is already slightly up compared to the 12 months in 2020 when these figures stood at 1.4%.
But now let's look at the developments on the post vulture cost basis on Chart 15. As you can see, our region apart from Asia have a positive contribution margin and even though with a slight decline compared to the prior quarter. Important to notice for Asia is that the line of course shows the entire segment. Keep in mind that we are investing significantly in Japan And at the moment, excluding this, the margin in Asia will improve by around 1 percentage point. For Asia, the slight decline in the margin is almost due to some rider shortage.
We have experienced in some countries in the region, which had the corresponding effect on cost. The shortage was mainly due to a restriction on copiers linked to the pandemic. And in terms of voucher users, they went up slightly compared to the total segment revenue. The ratio stood at 12.3% in H1 2021. And we still stick to our guidance, that's for the full year, we expect to come out with a number below the 2020 level when the ratio stood at 11.8%.
Now on chart 16, we present an overview of presentation, where we stand regarding our cash position. So having ended the 2020 with operating cash of €2,700,000,000 we were at €1,700,000,000 at the end of June 2021. And while we have raised €1,200,000,000 of cash right at the beginning of the year, we also had a sizable outflow of cash due to M and A activities, and most notably, the cash component for the acquisition of Oova. Apart from this, we, of course, had a cash outflow due to operating results, as well as a lesser degree due to CapEx and other items mentioned on the chart. On the next chart, we are sometimes we have asked that about the portfolio of minority investments we hold.
We have therefore decided to give you an update on this one. As As you can see, the total market value of our portfolio is €2,300,000,000 The largest position in our stake in is our stake in Global with a 35% followed by the 1 in RAPID with a 21%. And the next three positions are Deliveroo, Jet and Zomato. In addition to the learning that we have made from holding these investments, we have also generated very attractive returns in double digit and sometimes even in triple digit percentages. And with that, let me hand back to Niklas for a more detailed view at Korea and the development of the Demart business.
Niklas?
Thanks, Manu. So let's then start with the development of the important Korean markets first, on the chart here, you will find an overview of some major developments since June when VOOVA launched Permian 1, this is the name for our main OD offering, our own delivery offering. We launched this to close any customer service gap in the country. As you remember, the only reason for Kupang to have gained traction last year was that they offered a faster delivery compared to the experienced customer making at Gruva or also at Georgio for that sake. With the launch of BEMI 1 in June, the gap is now closed and we are now rolling out our product in Seoul and elsewhere.
On the back of this, the share of OD already doubled On a nationwide level to 8%, and it reached 29% in Seoul where we first launched them in 1. So again, we moved to 29% in that city. This was achieved because the team did a fantastic job by signing a restaurant very quickly for this offering, we already have 66,000 restaurants live in June. And I told you we would go in very aggressively, and this is what aggressive looks like. It goes without saying that the sales team is doing a fantastic job adding an insane amount of new restaurants every day.
And We said before that we will, of course, invest in signing restaurants first by using a promotional period, but the ultimate pricing is set to be the market standard or made market stand up with a 12% commission fee plus 3% payment fee and a 6,000 Korean won delivery fee. Average food value is currently around 21,001. So I think this is a very healthy level. Again, please keep in mind that we have a very strong brand equity, superior choice and customer service in Korea. And by now adding the fast delivery option, we further strengthen our position in Korea.
And I would add, at this point in time, we deliver also faster than our competitors in the market. This chart shows you some more details on data points I have already mentioned. You can see the very fast ramp up of the restaurants that have signed up to the OD offering on the left hand side and the corresponding increase of the share of loan delivery. As mentioned, we already reached 29% in COO. What is probably most interesting to you is the recent development of the active user share according here to App Annie in South Korea.
You can see on the right hand side that while Kupang has been able to increase the share last year, in the recent weeks, the share has declined sequentially, while that approval has further increased. We take this as an encouraging sign that our strategy regarding the additional product offering and faster delivery it's already paying off. And you should rest assured we are very determined to push ahead hard in Korea today to defend our very strong position already. Let me now give you we have a few more comments on our Demartes business on chart here on the slide as this also understandably getting a lot of attention by the market. We continue to see very good traction for our offering across the countries we operate in.
What you can see on the left hand on the chart is now the orders are developing on our Demart that have been active since June 2020 or before. As you can see, they are scaling up their orders quite rapidly. And after 12 months, around half of these stores we have 400 or more orders per day. It shows that we are in a very good in determining we're to open a D Mart and to make use of the existing customer base to choose the right location. And just for reference, any competitor going without this traffic, we'll have to spend 1,000,000,000 to achieve what we achieved with very limited marketing costs there.
Anyway, we are often we asked how our assumptions regarding the basket size of Demarts compared to the traditional food delivery business is trending, and we are giving an update on this on the right hand side of the chart. We have compared the average basket size of the DMarts in the countries we are active in today with the average basket size of the food delivery business. We have then built a weighted average across these countries. And as you can see here, in June this year, the ratio on average food value stood at 1.17, which means that average basket size in our Demart business is 17% higher and that of the food business. 6 months ago, the demark basket size was only 10% higher.
In that sense, you can see that the product is well received by our customer and they are increasingly order more via the demarts. In terms of profitability and in the context of current competitive environment, which is fueled by significant capital flowing into the sector, we think it would be unwise to optimize for profits at this point in time when many competitors are only caring about the growth. We are therefore reinvesting efficiency gains into the business in order to increase our footprint rapidly. We want to achieve faster delivery times, acquire more customers and be very competitive when it comes we are more than happy we expect to accept this. If we make economics tough for us with our scale and efficiency, it's going to be incredibly hard for our competitors.
In general, we are convinced that many competitors will realize that it is a little bit harder than they think to get this business model profitable. What you need is scale, experience in operating a logistic driven business model and on top of that the combination with the food business to leverage the same customer base and the same fleet in order to drive efficiencies much faster than you could if you only had one part of the business. In that sense, we are very happy to be patient and wait to see the current hype around Quick Commerce settling down a bit. We are certain that we will emerge as one of the winners in this sector, if not the winner. Finally, as you have probably already seen in our release this morning, we have decided to adjust our guidance.
Given the strong growth we have already recorded in the first half of the year, we are reflecting this in our increased growth outlook. For GMV, we have so far exceeded or increased the range the previous range from €31,000,000,000 to €34,000,000,000 And we have now narrowed it and increased it to €33,000,000,000 to €35,000,000,000 similarly, our expectation for total segment revenues are now higher as well. We expect this number for the full year to come in between €6,400,000,000 and 6 €700,000,000 Up until now, our outlook has stated a range of between €6,100,000,000 and €6,600,000,000 We are also adapting our EBITDA guidance, which is which so far has been in a range of 1 point or negative 1.5% to 2% of GMV. We are now expecting a margin of around 2% for this year. And I think that's it from our side.
Very much looking forward to your questions. Operator.
Ladies and gentlemen, at this time, we will begin the question and answer session. The first question is from the line of Joe Barnett Lamb with Credit Suisse. Your question please.
Excellent. Thank you. Afternoon team. Two questions for me given the first one sort of as multiple parts. So firstly, you You've moved profit guidance to the low end of previous guidance, but left the €550,000,000 of investment in new geographies unchanged.
I guess that implies about €100,000,000 reduction in core profitability versus where people were before. And your full year profit guidance and 1H profit delivered implies no meaningful margin improvement in 2H. So all of this together seems to tell us that you're going to invest more in existing geographies In 2H, is that a fair read? And if it is, is that investment largely beimin 1 and your fight back in Korea as discussed in the presentation. If so, will that peak in 2H 'twenty one or will the further investment in Korea continue to ramp in FY 'twenty two?
And then the second question is on Deliveroo and apologies if it comes across as sort of provocative. You announced a 5 Niklas, on Twitter, you explained it was a financial investment. Do you see this as a regular course of business for Delivery Hero, I. E. Could we see more Just financial sort of investments or speculation in other businesses.
And finally, are you saying there's no strategic angle at all
Thank you. And maybe you want to start on the EBITDA side, and then I'll I'll leave it around Korea.
So well, first, I mean like maybe repeat like compared to the year previous year, we improved our group EBITDA, right? I just need EBITDA massively moving from the minus 3.6 percent pro form a to now minus 2.1% primarily as you saw. And we had a good momentum in H1 in terms of growth. So the additional EBITDA investments applying our new guidance we'll be deployed mostly in other areas. We currently see very good opportunities in a handful of countries where we want to extend our market leadership.
And again, I mean, I should add that this EBITDA in H1 was negative by minus 2.1% on GMV. Underlying the profitability is increasing as we and we were trading well within the negative EBITDA guidance that we gave, some between minus 1.5% to minus 2.0%. So however, we feel that there are in a few markets, where we would like to invest harder, and we are already gaining market share, but this should hopefully help further. So that's the reasoning behind this further investments, but maybe Niklas, do you want to add something on Korea?
Yes. And maybe first a little bit add on that. Anna, we also reserve some money Respond if someone of our competitors is scaling up. We never want to be in a position where someone can bully us. If compares like to beat us, then spending up won't help.
They have to find other ways to have a chance to overtake us. Spending will not do, And we don't want to be bullied. So then I would probably also in general speak about EBITDA and a little bit remark there. All global players could easily be profitable. And I take delivery as an example, we plan to be circa 2% negative EBITDA on DNV.
We could improve 2% by increasing commission or by just 2% or add 2% delivery fee on orders. So very marginal fees there, of course. We could also have service fees like some other players we could increase logistic efficiency with, let's say, 15%, 20% to get there too. Or we could cut 2% of vouchers or we could increase baskets with 10% actually requires less than 10% basket increase in order for us to improve EBITDA from minus 2 to 0. Or we can do a combination of those.
So there are so many levers or levers for us to get to that profitability. It's just that we have absolutely no rush. We see this as a very long race, and we are committed to win. And we want to have the flexibility, I said, and we're clearly trading below 2%. And yes, there are a couple of markets where we like to double down a little bit, But we also like to make sure that we have the reserves to fight anyone who likes to bully us on spending.
That should not be a way to beat us. And so that's why we also want to have a little bit flexibility there. In terms of Korea, I cannot respond on which markets we where we see a possibility to spend up or where we see a good opportunity to further gain market share, I think we gained market share in every market that I'm aware of, with NABOR exception of 1, but where we did a little bit of a mistake on Social media, a bit more Thailand here, but I think that's very temporarily and hopefully we can also resolve that. But I think apart from that, we are gaining market share in every And these extra potential investments will further improve that position. Dan, you asked also Korea, peak result.
I don't comment on specific markets. I think in general, we are making big investments to moving from marketplace to OD. We think it's a very healthy move. It's good for our customers. It's it was good for our rest and it's good for our riders, but it's also very good for us.
I think we have more margins to be made or actually move to more market standard gross profit rates as we do so. So for that reason, as things start to play out of moving from temporary promotional pricing to normal pricing, there will also be significant uptick in terms of gross profitability there, which is hard to spend down. So as I said, I don't want to any particular markets, but I think people should be fairly confident when we speak about Korea. And apologies here because it's a lot of question and very critical question, good questions. So I'd like to respond to them carefully.
And I know you asked about Deliveroo and no strategic intention. And I guess that might be true. But I would also say that we always have some logic when we make these kind of investments, there is some logic or strategic rationale for any investment. This could be relationship For future partnership, this could be to gain knowledge, this could be acquisition plans, this could be preempting others, this could be cooperation agreements or something else. There are all sorts of different reasons why we would see an investment in a company, mostly private companies, but in this case, it was a public company.
Many of these bets are long term considerations. We cannot always share what the specific rationale is for an investment, while we have consistently done investments in company like Sumato, Global, Rappi, Just Eat Takeaway and others, in most the strategic rationale has played out the way we planned. Additionally, for us to make a deal, we also have to see that it makes good financial sense. And I think we have consistently done that too. To give you a couple of examples here, Arnhem, we invested below €2,000,000,000 valuation in Sumato.
2 years ago, it's now valued above €11,000,000,000 we invested at around €300,000,000 valuation in Global 3 years ago, and that is worth significantly more now. We invested on below $500,000,000 valuation in RAPID 3.5 years ago, and I think it's public to know that there's approximately SEK 5,000,000,000 business today. We also made a 55% return in USD Takeaway in just a few months when we sold some and locked in some gain from the increase we had from €0.25 share to I think around, let's say €75 via color, and that was 2 years ago. And we used that cash to invest in other opportunities, which turn out to be a very good decision too. So if something doesn't make sense anymore Or we lose the strategic rationale, then we are happy to get out and capture our gain or loss if that would ever happen.
But so far, we have made multiple returns in some cases and even more than multiple returns. So I think we are pretty happy here. We have a good view on this business more or less and how they work. And today, thanks to some of these investments, we have a portfolio of SEK 2,300,000,000 of pretty strategic holdings. Some will play out at the strategic rationale and some maybe not, but I'm pretty hopeful that in several of them the strategic rationale will play out and in many cases already happened.
When it comes to Deliveroo, I can't share any strategic rationale, but I can share that I will that I like Will and his team. I think they've done a great job. And when we started buying into the stock, it was at GBP 2.3 per share. The multiple on GMV was below 0.5 times, And we thought this was highly undervalued based on the company we know, because we know it's a good company and we didn't see a reason why a company that's growing 100%, having good economics, barely making losing money, so good economics, why that would be valued at such a discount. So we also saw this as financially Pretty attractive, but it needs to be both financially attractive and there's always some other aspect to it.
So thanks for listening for a very long answer. Yes.
Not Not at all. Sorry for the long question. Thank you, Nicholas.
You're welcome.
The next question is from the line of Miriam Adisa with Morgan Stanley. Your question please.
Great. Good afternoon everyone. Thanks for taking my questions. First one, just a follow-up on your statement about these EBITDA investments and the fact Is this you preempting an increase in competition in these markets or have you already started to see an increase in competitive intensity? And then also on the contribution margin, so it contracted a little bit quarter on quarter.
So was that driven entirely by the driver shortages in all regions? Were there any other factors that contributed to that? And should we expect that to continue in the second half? Or is this increased investment coming through marketing rather than And then finally, if you could just give a bit more color on the acquisition you made today in terms of financial impact. And then also just linked to that, if you could just share your latest thoughts on the dark store versus the 3rd party model for grocery and if you're starting to favor 1 versus the other?
Thanks.
Okay. So several questions here. Maybe I'll cover first the competition point. Maybe you, Emmanuel, do the contribution to the market and then I'll go for the rest. So no.
When we look to the food segment, I would say competition is probably less than what has been. So I I think competition is less than what it was in Q1. It's less than it was last year. It's less probably than it was before that as well. So I think we have seen a gradual trend and probably even more so in this quarter.
We see both in Korea as well as Asia, as well as against Uber Eats, against I think all players, the competition has been less intense. So we have not seen that yet. But I think we have seen more competition on the Demar side. There's definitely more capital coming in there. We might not have seen it in our markets yet, but we are very ready and aware.
If someone comes, we will scale up faster we will move even harder on economic strength. But so far, we haven't seen anyone entering our place there. But we as I said, we see good investment opportunities. We see good returns in places in a few countries as well. And we think that we can have a good return in some of them.
And therefore, we think it makes sense to add this flexibility and possibly go a little bit harder in a few places to further Strength in our market position. So far so good contribution Mario?
Yes, sure. So, Marianne, yes, they are the reasons for the slight decline are different for each segment. So, let's start maybe with LATAM and the GPO, our GPO after purchase in LATAM remain unchanged. In MENA, the GPO declined we have a bit due to our structural changes, especially in KSA, with the so called solidization of the rider fleet. And consequently, we had an increase of our CPO.
So we've had to include more and more locals, riders, if you wish, and that's had an impact on our CPU in general, the shift of this right of slate that we have in the KSA. In Europe, we are increasing our OD share in Greece and this is Greek is moving mainly from marketplace model to an hybrid one or more to OD. And hence, the GPO there in this country is still not positive. And in Asia, finally, the reduction was mainly due to our seasonal rider shortage, and mainly in Taiwan, and consequently, as from the pandemic and also some related restrictions due to the pandemic. So different kind of reasons for the segment.
I would say like going forward like the consolidation is something that we will probably see also in Q3 as we had to rebuild the flips.
Tania Akkadbailakkadzis and you're referring, of course, to Marketeo in Turkey, which is a online grocery platform and a very good one. And this is a very strategic investment for us, our investment acquisition, it helps us scaling our 3rd party grocery offering to make sure that we also have a leading grocery offering, not only a food service and a demark service, but also here. And Yes. I think this is a very good one. And as I said, We believe in the Turkish market, and we have some competition there.
And we will make sure that we step up, if need be, in this market. But I think this is a fantastic acquisition. It's in the mid million amount, So we shouldn't exaggerate the impact on cash or anything. It's fairly small in that sense, but it's also very good we have a we get a very good multiple because you also see that we can do this together. And there is a small earnout for the founding team.
So we know that they are also very excited to build something much, much bigger in Turkey with us. Overall, a great positive development in Turkey over the last couple of months. We really turned a corner here. I wasn't particularly happy a few months ago. Now I start to see this happening.
And I'm a strong believer in our position there we further gain market share in our Demart business, but also winning market share in our food business. Then when it comes to dark store or our Demart versus 3rd party. And we like both. I love to be a great partner some of the best local stores as well as global partners I like both I also like the Demar side, where we can make things much faster and even further cut down on cost and price versus the cost in local stores, which is not optimized for delivery. So I think you need both.
We won't have both. They both serve completely different purposes. So they complement Big Charlie very, very well. I'm bullish about both, but
yes. Great. Thank you.
I should add that it's going to be It's not an easy business to drive efficiency on and drive economics. I know it's very easy on an Excel sheet, And many players will show how they can make economics on an exchange sheet. I tell you, it's not as easy as people think, and that's why we see players losing more money than they have GMV. So basically, it will be cheaper to just give people food and on top of that, give them money Because that's what it is. When you have more burn than GMV, then you basically get things for free with an extra bonus.
We do not do that, and that's why you see that our burn for this Quickmar space per order is very low. And that shows again that the importance and the strength of our platform and our user base cross selling there, I think we stand very, very strong in others. As we scale up, we'll see how tough it is and they will realize what we have achieved so far. Great. Thank you very much.
The next question is from the line of Rob Joyce with Goldman Sachs. Your question please.
Hi, thanks very much. Hi, Nicholas. Hi, Emmanuel.
Hi, Michael.
Daniel, all very best in the future. So, I've got 3. So, couple of them on Korea. So, the First one is, thanks for giving us that second quarter Wuhua number. Wondering if you give us the GMV growth for the Q1 for comparison?
And then are you seeing an Second one in terms of The operating model there, you mentioned the promotional period. When does that roll off? How long does the promotional period of pricing generally last for restaurants? And do you think on a normalized pricing that I think you hinted at it that first party delivery will be more unit profitable than the existing marketplace in Korea? And then the other one is just on Japan.
Can you give us an update On your progress in Japan, how you're feeling about that market? And should we expect investments to accelerate in 2022 versus 2021 levels in Japan? Thank
you. Thanks. Do you want to start, Manon?
Yes. So, if I can I don't have the right number, the correct number right now On top of my head, what I can tell you is that we had a slightly less higher growth in Q2 compared to Q1 in VUVA, But I don't have the right the final numbers here on top of my head on for Q1? But as I said, there was a tiny a reduction in terms of growth in Q2 compared to Q1. This I mean for sure. I will look and then come back to you.
And here, of course, there is also some COVID. I know we had a big lockdown in January. So January was, of course, Incredibly good in terms of growth. So that affects the whole quarter as well. So and then
I can answer if you want to.
Yes.
No, let's leave it. Let's take the Tadasett operating model. So yes, we do that the underlying economics of delivery is at least as good Or it is we don't see that Korea would be different from any other market. So we are pretty optimistic that it will be the market standard, the gross profit that we can achieve there, we are, I would say, a little bit it's below market standard when it comes to the marketplace. So in that sense, I know your assumption is probably right.
Then in terms of promotional period, So we have signed up restaurants on where we said that there will be 3 months and then we'll discuss. I don't think that we'll do 3 months, especially since we are in COVID period still. And it's not the right timing to so we want to be helpful to the restaurant then. So right now, we don't see that That's the plan. So we will have to see.
But in general, I wouldn't the fact that the margin in this year will be it will only start moving in the next Yes, I would say because we also signed up a lot of restaurants throughout the year. So we should start to see gradual improvement from beginning of next year. The Japan progress, yes, very good. It's the fastest Growth that we had in any market that we launched. And it's yes, we are very hopeful.
It's still a long way to go. We still have to work hard, but I think we have gotten the right setup for having a good service offering. We still have some work to do there, but the more we start having the right setup and the right product offering, The better returns we have. And if you have better returns from our investment, it also means that we can start investing more in that market as we see increasingly better returns. So you can probably expect that there will be a little bit more investment there as well versus what we've done in the past.
Thanks, Nikolas. Okay.
I was
just going to say anything on the Q3, how that started in Korea post the rollout
It started really well. So it started really well. And you can imagine, we now offer A superior service on all aspects. So and of course, we also do a little bit promotion to advertise for the new service, we did a very we did some very nice updates in our app.
So
we are very happy.
And then,
yes, we are very happy with how it sounded and how it's continued. Thank you very much. Thanks.
The next question comes from the line of Sylvia Kurnia with Deutsche Bank. Your question please.
Thank you and good afternoon everyone. My first question is about future growth prospects. With the last quarter being the 10th in a row with growth of around 1 100%. You have constantly outperformed your short to mid term guidance of growth above 40%. So looking beyond 2021, can you tell us about how you expect the food delivery market to evolve And by the high double digit, if not triple digit growth can still be sustained.
Perhaps you could share an update on the online penetration of ordering broadly in your main markets? That would be helpful. Then the second question is about LeMarts. Thanks for saying the number you added in the quarter. Is the incremental AT on a quarter on quarter basis sort of a rule of thumb we can follow when thinking about the next 2 quarters of 2021?
And also related to that, can you please give us a sense of what markets you consider well covered with Bmarts compared to which ones are still underpenetrated? And finally, about the launch of FoodPanda in Germany, can you please share any feedback from the ground, for example, when signing up restaurants that perhaps you used to partner with 3 years ago or so. How differently are you pricing and how are you pitching your return? And also finally, if you can say any sort of early feedback from users, are you attracting unique users Or perhaps users that already have one of the competing apps. Thank you.
Okay. Thank you. So on the growth prospects, yes, we have quite massively exceeded our long term outlooks that That'd be given our midterm and short term for that sake as well. And we generally like to be Conservative on things we cannot forecast. We don't want to be wrong.
So I think in general, Things we cannot foresee, we tend to maybe be at tap conservative. So that also is the case now, and I'm going to speak about the future growth because I of course, we have tremendous growth. Cohorts are improving everywhere. The new customers get on the platform are more frequent than the past customers. And The longer they've been on the platform, the more the order.
So I think there's nothing that tells me that, that would change, But I hope that we'll continue to improve there. I would also say that in most markets, we only really just started acquiring users. There are still so many uses to be acquired. In some cases, it might be less standard, it could be 5% or 10% of population at trade our service. So we are still very early in the stage of growth or growing.
For that reason, I think that we can grow in very fast pace. We will not grow in triple digit Forever, we have done it now for a couple of years, increase from mid double digit to triple digit That can, of course, not continue forever. Then we shouldn't be the world's largest company. And maybe it will be one day, but it will not be in the next few years. So therefore, I think we start getting down to a little bit more normalized growth.
We should expect that from there, it's just the rule of scale. You have the size that we cannot increase year on year either. So I would rather say that we'll continue to grow very fast, but you should expect that scale is rather gradually moving that down, but it also means that it's gradually moving down, which means I'm pretty optimistic when I look at the time year or 10 year horizon that will be a very, very large company. Then when it comes to DMart, I'm not 100% sure I understood that questions. So maybe you can repeat the Dimon question there.
For sure. What I meant was given that even in the Q2, you added about 80 extra lemons on a quarter on quarter basis. Is that a good rule of Can you think about the additions over the next two quarters?
Got it. Yes. So We didn't see the need to increase number of stores faster than what the business actually kind of can comprehend while still have good economics, because we need a certain number of orders per store in order to have some economics and make the math work out. So therefore, we increased probably stores A little bit slower because, yes, we are already the clear service have the best service offering in the markets we operated. And yes, so we probably balance that a little bit more to having higher efficiency and more demand per store.
So that's a little bit the last couple of quarters. I think as competition is heating up further, I think we were going to increase the pace in H2, not because we have seen anyone entering our market, but we just increased Yes, because we are very bullish about the industry, we think that it's going to continue to grow very fast in Q3, Q4. And we might front load to opening up more stores to have an even more Branding offering just in case. Then it can a little bit in which markets and so on. And of course, we started in the Middle East and have expanded that to rest of the world.
I think Asia and Latin America has been a little bit more focused in Europe. In Europe, we have rolled out, but at significantly less scale. And we think that the model works in every market, but also our business is all in Europe. So we have less synergies with our overall business because we have less than the suborders, less users per capita and so on. And therefore, we prioritized some other regions, but we think that the business model can work in every place, At least if you get scale and size and yes, so hopefully that answers the third question.
And then on footprint pricing, and I think that was in relation to restaurant, if I remember right. Yes, we see that probably on average, we are generally increasing a little bit over time. We are also implementing certain commission caps and so on to making sure we don't go below a certain level where we don't make economics, good economics. So I think we have very healthy commission levels to drive good profitability in all markets. And I would say it's kind of over time probably increased a little bit versus decreased.
And as a little bit to the question of users, we the customers require are most likely new users. Of course, there might be some lapping customers going to 2 platforms and so on, but I think the majority of users actually stick to 1 platform. And that's what we've seen in the past and that's probably true now and most of acquisition is coming from new users rather than customers who have ordered food before with another platform. Thank you.
Yes. Thank you.
We are a little bit short on time. So maybe Max, two questions.
The next question is from the line of Gil Thorne with Jefferies. Your question please.
I will actually beat and raise that and just ask one question. I recall comments and I can't remember whether it was on a results call or So, I'm recalling comments a year ago that the Demart model wouldn't work particularly well in a place like Stockholm for reasons related to population density and income disparity and the usual types of things. And now a year later, not only are Demartes doing very well in Stockholm, but they're also now going to Stockholm suburbs like Brommer and then to cities like Lund. And forgive me, Nick, as I had to Google Lund, and it seems to be a fairly small city. So that feels like a substantive change in, I don't know conditions for having a viable demap, which in turn signals that this could be a lot bigger What we're all anticipating if Tier 2 and Tier 3 cities can support the model.
So I'd be interested on your comments on that. And that was it. Thank you.
Thanks. And you obviously know this space very well with the Demart. I admire your work there. So Yes. I would say that we are happy with the coverage and the focus that's taken.
And You're probably right that the comment that we made before is probably true, but we realized that the market in general is bigger than we thought. So that makes even a country like Stockholm or Sweden suitable for this. And that's you've seen probably we have something like 20 stores in Stockholm, I think, or in Sweden and then to 50 or so in the Nordics. So you're right. We have gone a little bit downstream.
We also learned a lot on how we can make this economical even in smaller cities. But again, I'd like to point out that this is a very tough business model. I think with our size and scale and brand recognition and logistic efficiency and so on, I think we can do it. But it's not going to work for everyone. And especially when there are several players in one market, I think it's going to be very, very tough.
But we obviously aim for always being number 1 and we'll do what it takes to be number 1. So I hope it's going to work out for us at least.
The next question is off the line of Andrew Roth with Barclays.
Great. Thanks for squeezing me in and hope all is well everyone. I've got 2 both on Korea, so hopefully quick. First one is on the restaurants joining BaiMin 1. Can you talk a bit about any kind of order uplift they're seeing as they move to the new offering?
And I guess, ultimately, how many restaurants You think might migrate to the Bayman 1 model? And the second question is, can you talk a bit about the cost per drop on the delivery, I guess, both now and in a steady state in Korean long term, so that we can have a better go at computing where that gross margin as a percent of GMV may end in a steady state?
Thanks.
Yes. So we do see a fair number of restaurants who moved into having both, Bermin and Bermin 1. We keep making sure like the orders on the BAMIN is remaining. And then additionally, we have managed to to get the Mambia B1 and drive orders there. There's also a number of restaurants that we never had that we can now add.
So there is a significant expansion in Choice, Thanks for this offering. So I think that is also helping us a lot here. But I think Yes. I don't want to say any particular number here, but you have a little bit of both. In terms of cost per drop, We don't generally disclose, but I think it's I think our hope is, of course, that we can cover our cost per drop with the delivery fee.
And I mentioned a little bit delivery fee before. There might then be then there are some other costs associated to free delivery as well it depends also a little bit if we keep on or if we do one drop or if we start doing multiple drops, it depends a little bit on our efficiency of our logistic operation and so on. But I think we've proven that We can make economics even if in the most hard markets. So Yes, I think that's as much as I can say. I hope that's enough.
Yes, that's great. Thanks a lot. Very helpful.
Thanks a lot.
The next question is from the line of Sarah Simon with Berenberg. Your question please.
Yes, hi. I've got 2 questions. First one was just any update on your thoughts about Description model like Delivery Plus, they were talking about that yesterday and your thoughts on that As it relates to your markets. And the second one was for Emmanuel. If we look at your guidance, there is quite a significant step up in the take rate implied in the second half.
Now obviously, there's an ongoing shift to own delivery And there's also the fact that by far the fastest growing part is integrated verticals where the GMV and the revenue are kind of not a 1000000 miles away. But is there anything else we should be thinking about? Or is there anything else driving that step up that we should know about? Thanks.
Yes. So on the subscription model, yes, we have been trying to get subscription to work for a long time and then we failed for a number of years to get it to work and get it economical, and that's why we never scaled something. I after many trials, I think we have something that works really well, and we are scaling that. Of course, as we scale it initially, there might be a little bit Costs associated to that as well because we want people to try it out and realize all the benefits. And I think that is happening.
And the trick is, of course, to making sure that you don't have worse economics when you have a subscribing customer. I think many players do the mistake that they get the same economics per user, But not per order, and of course, if you scale that user that user goes from 5 orders a month to 20 orders a month, then that's terrible to not improve your economics on that user. So therefore, for us, it's always been very important that we can get the same economics per order even if that customer is scaling down from 5 to 20 August a month or so. So I think we find a way and I think we can further improve it by making sure that there are special promotion, that restaurants can give those promotion as well. But there is a little bit of as we work on the offering and making show that we get more restaurants participating, there is also slight support from our end, we should also have a little bit impact on our gross profit in the last quarter and maybe we can have a slight negative impact in the next couple of quarters as we scale it up.
But overall, the subscription model, I think we are very happy asset setup at this point in time. And maybe Emmanuel?
Yes. So on the take rate, maybe on the take rate, I think this is a mixed effect. I mean, there is nothing specific popping out in my mind. I mean, that will be the improvement that we see also in the past where signing new restaurants or new vendors, joining the platform, we will then sign them always like higher conditions than in the past. As you know, we are putting a lot of efforts on the MTR, the non commission revenue.
We're also looking for improving the pricing with the dynamic pricing. So there's a lot of levers that we are working on continuously and that should drive this improvement over time, but nothing particular to mention here in terms of it's a very special impact that we are expecting.
Perfect. Thanks.
The next question is from the line of Andrew Pottos with HSBC. Your question please.
Yes. Hi, gents. A couple from me. So I guess sort of just thinking about the opportunity in grocery, I mean clearly sort of Demart rolling out very quickly, but there's a lot of competition in that segment. I'm just thinking conceptually, do you think about grocery as being sort of a must have from a success perspective in order to sort of Support your restaurant business long term or do you just think it's quite a separate opportunity and it's sort of incremental to the sort of core restaurant business that you have?
And then secondly, just sort of a question around the vouchering in Q2. Clearly, we saw a step up. I know you're flagging that coming off in the second half, but just wondering what drove that step up? Are you seeing more competition? Are we seeing a bit higher churn?
Or is there anything Our customer acquisition costs perhaps going back to more normal levels that's really driven that increase in vouchering.
Maybe I'll start with the first one and then you decide, Emmanuel, if you want to take the next one. So groceries must have. No, I don't think it's a must have. I think it fits with our strategy of being a delivery super app. I think it does help We're on a cross pollination type of thing and getting frequency and loyalty and subscription programs, etcetera.
But I think Possibly the worst combination is to be defocused on both areas a little bit half assed. And I think you will see some players be wanting to play in that space, but they don't really. And I think that that's probably worse than 2. So if you are very, very focused on used food, that's probably fine, or you cover groceries and other things, but then you also have to completely change your systems. You have to it's not just adding them like another restaurant.
And I think that is what some, I think, players and platforms and labels investors believe it is a very different setup If you want to do this successfully. And if you don't do it properly, then you're probably better off not doing it at all. Emmanuel, do you want to cover the second one?
Yes, sure. So during the first half of the year, we had several initiatives where the board sharing were used to support our business. I'm thinking here, for example, of the platform migration and rebranding in LatAm of the global countries, But also we've done some customer push, acquisition push in the impact with also very selective countries in Europe as well to support also the launch of the new Dmarts and all these components will expand the development that we've seen in H1. And I mentioned, like I think that we are confident that we could reduce or we can reduce the level Well, depository to roughly 11%. As usually, this voucher income can get less efficient over time.
But at the same time, and I think it's very important to reiterate this, we constantly evaluate where we get the best returns and there might be some temporary deviations as we move into new verticals or even new areas, new cities and so on and so forth.
And of course, Emmanuel, I'd say 11%. We generally are thinking in GMV, and I think that's more around 3%. Revenue? And I've said it before and I'll say it again, efficiency of vouchers over time is also declining. So it has a strong value when you're ramping something up and when you get to a certain size.
I don't say that it doesn't work afterwards, it works really well for getting a customer to order again. But you then get more and more reorders from existing customers rather than acquisitions of new the new customer. And that's, of course, that makes the return much, much lower. So therefore, the efficiency as whole is also then declining over time. It gets they start having other channels and other marketing activities that are more effectful than actually on the Besides, I think if there is a new offering, great, get people to try it out or if you're early in the market, great to get people to try out, but over time, it gets less and less effective.
And that's why you see usually the voucher share will decline as a percentage of GMV and potentially other marketing channels will increase a little But overall, I think we've seen a healthy kind of marketing including vouchers and all in, it's probably long term more like 3%, maybe even less I see some of the other players and peers, but of course, that is when you have full scale that it goes below 3 percent as a total and that is marketing and voucher all combined. Right now there is both marketing and vouchers making that percent a little
Just say, Manon, do we have time for more or do you need to drop?
Maybe we can do, I don't know, one more Or 2 if it's short.
Then operator, we can take the next question.
The next question is from Clement Gianlaud with Bryan Garnier. Your question please.
Hi. I will get 2 questions from my side. So the first one is on SoftCorrea. To what extent do you think you have the ongoing boycott of Evinc Orient against Opank, it helps you to stabilize your market share versus Opank. And my second Question is on the Demart.
Investors are more worried about the European and I know so U. S. Could cook almost players are putting some pressure on your Dear Masters, but do you see any of the dark store players in your geographies Apart from Europe, I only have in mind markets in Mutter Key and Jokow in LATAM markets.
Yes. So yes, Kupang is always having a little bit of a tough time with boycotts and certain incidents. And I I think in general, they've taken a little bit hit on the reputation also when it comes to food. I think kind of for us, we have been very lucky Building a very strong brand, and I think we had a little bit last year some negative news Also partially connecting to transactions and approvals and so on, but you have seen that completely shifting. So if you look at the general perception and then of our brand, Bermin, in Korea, it's exceptionally good and it's been exceptionally positive also because they are acting with 100% focus on every instant of the ecosystem.
That means they care a lot for riders. They care a lot for restaurants. And you can see that and people know that and they feel it that it's carrying. And as you know, the CEO and founder of Bearwind, I think he also donated SEK 100,000,000 on from his own pocket to riders and to restaurants, Incredibly generous there and he keeps on doing a lot of charity work and is an incredible person, It's extremely liked and supported. So today, we have built an incredible reputation and a loved brand, and we have seen that positive impact to us over the last quarter or 2.
And of course, Kupang have had a little bit of the opposite with all sort of issues. But I'm sure they'll come back. It's a good company. So I have no doubt it's a very serious compare that we take incredibly serious and we'll do whatever it takes to make sure that we remain the clear leader in this space. And I think that's the market share of diamine hasn't been touched for years.
Even last year didn't really impact the market share and the cohorts and so on. So it's been good. And then kind of Demart, no, We haven't really seen any quick commerce player really in our market. There might be a few stores here and there with someone. There might be some market.
And of course, Germany now, there is strong quick commerce players, dark stores players. But under Germany, we just started. And as I said, we're still Yes. We still take this opportunity to care for. We mainly launched Germany to make sure that we learn and we can build a product where we sit because otherwise we cannot build the best global service without being in Germany.
So that's why we do it more for ourselves and then we'll build the best service and then we'll see where that takes us. But we're also a little bit careful in our investments there. Yes, so not so much to answer it straight.
Question is from the line of Jurgen Krog with Kepler Cheuvreux. Your question please.
Thanks very much. Hi guys. Two quick ones on Demart. Thanks very much for the slide on Page 21 where you provide additional details on the Demars. Just one question on the left hand side of this slide.
It looks like the average orders per day of the average demars that you depicted there just leveling off at around 400 plus obviously. Is that kind of a sweet spot that's a good number to deal with or would you say that Just they're taking a breather and with more scale they can do much better than the 400 plus orders per day on an average demart business or does that maybe is the limit for the size of the demart and the business that you have? That's the first one. And the second one, I forgot when you did that, but you provide us at some stage with a calculation on the Demart business and the Q Commerce business with like an average commission rate like 22% and some picker costs and delivery costs or what have you. Given that you've increased your size and the number of demarts and obviously, you've become bigger here.
And of this scenario calculation, where would you say you've gained superior scale effects so that the profit contribution is getting higher. What's the what was the driver predominantly that makes the economics of the Demarts even better than what you already told us?
Perfect. Yes. So on the $400,000,000 it's $400,000,000 is a good level to be, but it's not enough. We need a little bit more per store to make them achieve the profit contribution that we plan on. However, when we come to €400,000,000 it starts to be okay.
And the reason why it's kind of capping out there is that we're building more stores So we start reaching higher levels. And then of course, this is an average of maybe some having 300 and some having 700. And therefore, we then make sure that we start building more stores and that, of course, takes down the average. So it's a little bit us making sure that we build more coverage around that store, shortening delivery distances. We should also reduce the cost Because if you have one store within a couple of kilometers of delivery, it's very hard to make the economics as well.
So you need a lot of orders per store in a very small delivery area, but we accept delivering a little bit longer until we reach kind of a sweet spot on orders. So I think long term this will increase, but it will be always kept down a little bit with the new openings. Then on the calculations that we've shown before. So one of the leverage is exactly how many orders to get the store because you have store managers and you have pickers. And if you don't utilize them well in a store, then it's expensive.
The same is and you have CapEx cost and inventory cost and so on. And of course, the less turnaround you have on your store, more wastage You will have and so on. So I think the number of order per store is very, very important to get right. Then of course, there are some other things making sure that we and that the purchasing power, I don't think we have that yet. And we also not optimized it for it as much Yes, because we still have a little bit size to do before we can really go to the CPG companies and other than getting it right.
And in some product categories, we will also have to build white label solutions. But that is not the priority right now. And there are still some levers there that we that will take some years to get right. But I think in terms of efficiency, logistics, picking, procurement, I think we're doing really well with the size that we have at this point in time, but more levers to come. Then I'd like to add maybe one comment on the previous question because I forgot, of course, that we do have a serious competitor in Turkey.
So there is overlap there. They started, I think, 4 or 5 years before us. I think we have gained probably, let's say, we are maybe at 35% or so, maybe we have reached 40% market share, but let's assume that there's still 35%, 40% market share there against that player in Turkey. We obviously only operate it for a little bit more than a year. So I would We will at some point on a fairly soon hopefully reach that 50% market share.
So I think We have good development there, but of course that is one market with strong competition.
Very good. Thanks very much guys.
Thank you very much. And if that was the last question or at least the last we will have time for today, then I'd like to thank everyone for listening in and for your support, But also for the full team for your incredible job. I think this was one of our best quarters we have had for several years, both on the top line as well as bottom line as well as market shares as well as expansion to all of that. So I think a huge thanks to all your work. We are building a service to customers' love, a service that has helped restaurants staying afloat during COVID and created hundreds of thousands of job opportunities to riders that value, the flexibility that we can offer.
So I'd like to thank everyone for your tremendous job and also thanks to all the investors here supporting So thanks everyone and hope you have a great rest of the week. All the best. Bye.