KDDI to make investments in Japan’s third greatest food shipping and delivery application Menu

TOKYO — Japan’s KDDI is set to make investments in the country’s third-most significant foods supply service, Menu, as the telecom operator seeks to increase its mobile payment system by creating use of shipping and delivery info amid flat growth in the telecommunications business.

Uber Eats Japan and Demae-can are the two premier foods shipping companies in Japan, but the newest move illustrates the heightened competition prompted by an growing current market and enhanced need for deliveries introduced on by the COVID-19 pandemic.

KDDI will spend all around 5 billion yen ($45.6 million) in Menu, a Tokyo-based foodstuff shipping and delivery startup started in 2018, using a 20% stake in the organization underneath a partnership to be agreed as early as this month.

Reazon Holdings, which operates several corporations, which includes smartphone sport makers and advertisers, is at the moment Menu’s sole operator. KDDI will just take a stake in the firm by a third-celebration allocation of new shares, turning the startup into a KDDI equity-technique affiliate.

Info analytics firm Values says that Menu had 978,000 regular monthly users in April, earning it the No. 3 meals delivery company in Japan, driving Uber Eats’ 4.56 million users and Demae-can’s 3.55 million. Menu does business enterprise with 60,000 dining places, in comparison with extra than 100,000 for Uber Eats and Demae-can’s 70,000 companion dining places.

By the investment, KDDI willsupport the enlargement of the Menu franchise and make it possible for buyers to shell out for Menu merchandise by way of its au Fork out smartphone payment service.

KDDI’s purchaser foundation of about 30 million will also be made use of to examine purchaser tastes by integrating customer data and Menu utilization historical past. The enterprise options to propose eating places to customers and distribute low cost discount coupons to them.

The food supply marketplace has grown fast in Japan in the course of the pandemic. The industry expanded by 50% from 2019 to 626.4 billion yen in 2020, according to NPD Japan, a current market investigate expert centered in Tokyo. The progress fee was all over 5% a calendar year ahead of the pandemic.

The progress of KDDI’s main communications enterprise has slowed owing to a falling population, amongst other variables. On the other hand, the operating cash flow of the firm’s noncommunications enterprises, this kind of as economical providers and e-commerce, is expected to enhance by 26% annually in the fiscal 12 months ending March 2022. These organizations are forecast to overtake telecommunications expert services in terms of revenue by 2030.

Other telecom companies are also wanting to food stuff shipping and delivery expert services to enhance their payment providers small business. SoftBank Group has a stake in Uber Systems, the mother or father enterprise of Uber Eats Japan, while Demae-can is correctly a subsidiary of SoftBank Group company Line, which has a stake of much more than 30% in the meals shipping and delivery service.