The entry of our FROLO (Free Restaurant OnLine Ordering System) is going to place a lot of pressure on the existing companies. Marketing4Restaurants already works with a lot of restaurants doing online ordering and we see Menulog being the strongest by far, followed by Eatnow, and then a far distance to Delivery Hero.
2015 will be an exciting year for take-outs and restaurants with a delivery service, with everyone now having access to taking orders online without paying a percentage per order and without having to share their customer’s details with other companies.
The online ordering game is a game of scale and we believe that the size of the Australian market will make it difficult for 4 companies to exist profitably. Therefore, it is quite probable that one of the companies will exit the Australian market.
We expect FROLO to do two things:
1. Take market share away from the other 3 as Restaurant and Take Away owners look to decrease costs by not paying per order or per month; and
2.Educate Restaurant owners that they shouldn’t share their customers contact details with other companies who will promote their competitors.
We believe that there is a fair chance that Delivery Hero will withdraw from the Australian market, given that they are the smallest of the old business model companies and probably a fair way from profitability. They have much bigger markets that they already dominate and they may think that the writing is on the wall in Australia and decide to pull out. As for Eat Now and Menulog, they will certainly be very aggressive to retain their market share, but it will become increasingly difficult for them when Restaurants can use any ordering system on their website as well as use each of the companies.