Deliveroo’s Singapore exit ‘bound to happen’, paves way for Grab to expand: Analysts

SINGAPORE –

Deliveroo’s exit from Singapore

was inevitable, given its small market share and reliance on a single line of business, analysts said, with the food delivery market now shrinking to two dominant players, raising concerns over reduced choice and pricing power.

“It was bound to happen,” DBS Bank Group Research analyst Sachin Mittal told The Straits Times, noting that Deliveroo’s lack of scale and diversification made it difficult to compete with rivals Grab and foodpanda.

With just a 7 per cent share of Singapore’s food delivery market, compared with Grab’s 69 per cent and foodpanda’s 24 per cent, Deliveroo’s business here was not sustainable, Mr Mittal added.

“The local market can support only two players of comparable scale. There is no reason for us to have three,” he said.

He noted that unlike Grab, which benefits from diversified revenue streams including fintech and ride-hailing, Deliveroo is non-integrated and operated as a single-line business.

Despite remaining profitable, Deliveroo has seen its Singapore revenue shrink substantially – from more than $98 million in 2021 to $55.5 million in 2024, based on Accounting and Corporate Regulatory Authority filings – underscoring the challenges of operating at subscale in a crowded market.

In a Feb 25 statement, US-listed on-demand commerce platform DoorDash said its wholly owned subsidiary Deliveroo will exit Singapore on March 4 after concluding that the investment needed to compete in the market was not consistent with its long-term strategy.

DoorDash, which will also exit Qatar, Japan and Uzbekistan, noted that its decision was based on a review of “country-specific conditions”.

The exit comes roughly four months after DoorDash, which reportedly holds about two-thirds of the US restaurant delivery market, completed its £2.9 billion (S$5 billion) takeover of then London-listed Deliveroo in October 2025.

In a letter to shareholders on Feb 18, a week before announcing Deliveroo’s Singapore exit, DoorDash chief executive and co-founder Tony Xu noted that the company operates across multiple tech platforms, including Deliveroo’s, which slows down operations.

Mr Xu added that DoorDash is now investing in a single global system to become more efficient, a move he described as costly and complex, but central to long-term strategy. This implied lesser tolerance for subscale markets like Singapore that add complexity without delivering meaningful returns.

Morningstar equity analyst Mark Giarelli said the decision “is not a reflection of underperformance in Singapore, but rather a deliberate effort to streamline the portfolio and focus on core growth regions”.

Morningstar senior equity analyst Kai Wang said the food delivery business is low margin but requires a lot of cash to operate, making it much harder to compete with a smaller market share.

With Deliveroo Singapore now under liquidation, he noted that market leaders like Grab will have better opportunities to expand because of a larger network and the ability to outspend competitors in providing incentives, customer loyalty programmes and other services.

Mr Mittal added that Grab, which reported its first full-year profit of US$200 million (S$253 million) in 2025, has already been focusing on expanding market share with the launch of more affordable products such as Shared Saver and GrabFood for One in April 2025.

He added that with Grab emerging as a clear market leader in Singapore, “we are also doubtful if foodpanda can be profitable in the future, with just 24 per cent market share”.

Whatever the case, with fewer platforms in the market, consumers here are likely to see less choice and reduced price competition.

Deliveroo user April Lim, 30, said she was very upset over the platform’s coming closure.

“I order in food regularly, especially when work gets quite busy. I do have a GrabFood subscription but am worried the price might increase due to less competition in the market,” said Ms Lim, who works in professional services.

Another Deliveroo user, who declined to be named, said free delivery for Plus members on orders above $15 was a big draw.

“Other platforms only have $3 off for members, and delivery costs can get quite high, going beyond $5,” he added.

When contacted, the Competition and Consumer Commission of Singapore said it is monitoring developments and “in the process of seeking further information from the relevant parties”.

Platform delivery riders will be affected too.

One, who declined to give his name, noted that “Deliveroo offered unlimited rejection and cancellation of orders received without any repercussions”.

He said this aspect was the “ultimate differentiator from other platforms”, resulting in less flexibility for riders from now on.

The rider, who is 41 and has been working with Deliveroo since 2022, added that some $300 in earnings still owed to him will be paid by March 10 but that no further compensation of any sort was mentioned by the platform.

In response to queries from ST, Deliveroo said it will work with “all impacted partners, employees and riders” in this phase of transition.

“We will be engaging individuals directly on the support available to them and will ensure all processes are handled in line with local regulations and company policies.”