San Francisco-based company DoorDash plans to expand beyond online food ordering and delivery. The company has its sights set on venturing into retail and grocery services this year.
DoorDash currently operates in more than 20 countries, with Uber Eats as its biggest competitor in the food delivery sector.
According to YipitData, the company also holds a 59% slice of the restaurant delivery market in the US.
DoorDash plans to expand
As reported by Financial Times, DoorDash will be diversifying its core business structure (delivering restaurant meals to diners’ doorstep) by investing in projects outside of the food delivery sector, and outside the US.
But, says DoorDash CEO Tony Xu, the company has a “high bar for acquisitions.”
He explains: “We’re not investing into every single project at the maybe levels that we like . . . but we’re always looking to reinvest.”
DoorDash’s recent ventures
One of the company’s recent ventures was the $3.5 billion purchase of Wolt, a Finnish delivery startup that closed doors two years ago.
In order to stay ahead of its competitors, DoorDash wants to target smaller geographies, including Austria and Iceland. Recent job postings suggest the company will also expand into Luxembourg.
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DoorDash also co-branded and launched a credit card with Chase and MasterCard. The card unlocks member benefits and rewards on purchases both on and off the DoorDash platform, including cash back, and a year of free DashPass on orders placed via its subsidiary Caviar.
And in January 2023, DoorDash launched ‘Package Pickup’ through which consumers could request a driver to collect prepaid UPS, USPS and FedEx package returns.
Analysts are cautious
DoorDash recovered from a rough 2022 financial year, bouncing back as its stock value surged by 106%. The company’s financial health also improved as it generated $6.3 billion in sales through the first nine months of the year – an increase of 33% from the same period in 2022.
Xu says DoorDash “went from zero to a multibillion-dollar business.” He believes the expansion will be a success since the company already has “a large consumer base and a large driver base that is interacting many times a week.”
Despite the gain, the company’s stock remains below the bar set in November 2021, and analysts are monitoring DoorDash’s expansion efforts with caution.
Wedbush e-commerce equity research analyst Scott Devitt said the company has a “long-term domestic opportunity.” However, he cautions that there is an execution risk with venturing into “highly competitive grocery/retail categories and international markets.”
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
