Korean delivery company, Woowa Brothers, and German delivery service, Delivery Hero (DH), met in Gangnam, Seoul on Tuesday to sign a partnership agreement for global expansion. The two companies will join hands to advance into the Asian Market, establishing Woowa DH Asia in Singapore.
According to KoreaTechDesk, Delivery Hero will acquire control of Woowa Brothers for US$4 billion, obtaining 87% of the company’s foreign and domestic shares. As part of the deal, the 13% of Woowa held by its senior management, will be converted into shares of Delivery Hero. The joint venture (JV) will also give the companies a 50-50 stake in its Singapore operations.
The German company currently operates in Taiwan, Laos, Malaysia, Bangladesh, Singapore, Thailand, Pakistan, Philippines, and Hong Kong, expanding to South Korea and Vietnam with the partnership.
Woowa Brothers’ CEO Kim Bong-jin will act as the chairman of the newly-established company, Woowa DH Asia, managing the whole operation in Vietnam. Kim will be the largest individual shareholder of DH’s management and a member of the three global advisory committees formed at DH’s headquarters.
The partnership of the delivery companies signifies the change in the app market environment. The Korean delivery company ranked first in the domestic delivery applications; however, a series of advancements in the local IT platform challenges its dominance.
Korea’s food delivery market is the third-largest industry in the worldwide app market. The industry believes the Asian market will likely continue to grow. Analysts stated that the two companies established the joint venture to protect the domestic market and also to advance into the international market. The cooperative system also protects from encroaching large IT platforms.
The cooperation between the two companies would create a synergy effect. Woowa Brother’s know-how on the domestic market and Delivery Hero’s experience and technological prowess in the global market would put them in an advantage over the market. Both companies would enhance their operations and improve the efficiency and accuracy of orders.
Delivery Hero is an international leader in online food delivery service in over 40 countries located in Europe, Asia, the Middle East, and Latin America.
“The Asian market is the most promising region for delivery app growth,” an official from Delivery Hero said. “We will provide support to CEO Kim Bong-jin, who achieved the No. 1 position in the Korean market in which competition is fierce so that he can display management know-how throughout Asia.”
As CEO Kim Bong-jin enters the Asian market, the Chief Technology Officer Kim Beom-jun will take over the management of Korea’s Woowa Brothers.
The deal will also set up a $50 million innovation fund supporting the development of services in the field of Food and Technology.