Third Party Players in Foodservice

Third party delivery services have accelerated in the past couple of years, especially with the entrance of Wolt into the local market at the end of 2018. Wolt offers short term delivery services from a wide variety of restaurants mostly in the Tel Aviv area. Ten Bis existed long before Wolt, however their primary focus was membership cards, specifically for company employees; Ten Bis started delivery services by the end of 2018, developing that aspect as well. Since then, these two companies have expanded greatly and have caused a lot of buzz. In January 2020, Wolt partnered with Cibus (another major company-membership player) in order to penetrate the B2B market as well.

Third-party players are a strong growth engine for many restaurants, especially those that did not previously have their own delivery services. It causes strong exposure to further locations and potential clients.

Wolt and Ten Bis are constantly trying to expand delivery areas, branching out of Tel Aviv, so far only in major cities in central Israel, but expected to expand further in upcoming years. It is vital that these players only enter relevant cities that have enough restaurants and business, so as not to invest in places that may fail.

Though the advantages are high, there are also disadvantages for restaurants as commissions taken by third-party players are very high, potentially hurting the restaurants profit. However, due to the strong exposure and high customer potential, it is often worth the price they must pay.

From a consumer perspective, the popularity of this trend has been very strong, but what is this stemming from? The main factor is likely the on-the-go attitude that consumers possess these days; much of the population wants things as fast as possible with the least amount of effort, and this delivery format is quick and generally very convenient.

From seeing countless bikers at lunch time with their blue or orange delivery bags, to joining the fad and ordering a quick meal from the location of your choice, this trend has likely affected you in some way and is expected to grow more dominant in upcoming years.

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