DoorDash Inc. is bringing its on-demand delivery service to Japan, marking the San Francisco-based company’s first expansion into Asia in a bid to boost its international footprint.
The biggest food-delivery company in the U.S. will enter one of the most restaurant-dense countries in the world in Sendai, DoorDash said on Wednesday.
Merchants will have access to DoorDash’s marketplace app, where users can order from an array of participating eateries, as well as the storefront, an online ordering product that helps restaurants create their own websites for pickup and delivery. The storefront service will be commission-free through the end of the year, with the only cost to the merchants being payment processing fees, DoorDash said.
“Our strategy has always been to empower local economies, especially in the suburban markets that are historically underserved yet the appetite for connectivity between merchants and customers is high,” said co-founder and Chief Executive Officer Tony Xu.
DoorDash has benefited from the pandemic-induced boom in food delivery, as indoor dining shuttered and people stayed home. The company has expanded its market share since the start of the pandemic and now commands 56% of U.S. food-delivery sales as of April, according to research from Bloomberg Second Measure.
Japan marks the third country outside the U.S., for DoorDash, which already operates in Canada and Australia. Bloomberg has previously reported DoorDash has made inquiries about potential food delivery acquisition targets in Europe.
“Geographic expansion is essential for DoorDash to sustain its top-line growth though it is hard to find markets in online delivery where competition is less,” according to Bloomberg Intelligence analyst Mandeep Singh. “I think Japan makes sense as there aren’t any local players that have a big market share.”
DoorDash Japan Country Manager Ryoma Yamamoto said Sendai was chosen to begin its operation because “even though it is a large city, the penetration rate of delivery services remains low, and demand is expected to grow.”
He said it will be easy to develop suburban-type services in Sendai but did not give details about expansion plans in other Japanese cities.
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