TOKYO, May 19 (News On Japan) –
Japan’s meals supply business is coming into a brand new part of fierce competitors, with main operators locked in a chronic battle over pricing and market share whereas profitability stays elusive, elevating issues about the way forward for home participant Demae-can, whose stock has plunged roughly 97% from its pandemic-era peak.
Food supply companies, which permit prospects to order restaurant meals through smartphone apps for supply to properties and places of work, expanded quickly in the course of the COVID-19 pandemic, however many corporations have struggled to show that progress into sustainable income.
In Japan, the market is dominated by Demae-can and Uber Eats, whereas a number of smaller opponents proceed to battle for share. Finland-based Wolt, which operated in Japan beneath the DoorDash group, withdrew from the Japanese market in March 2026 after simply six years, highlighting the issue of working a worthwhile supply enterprise within the nation.
Demae-can’s shares as soon as traded above 4,000 yen in the course of the pandemic increase, however lately have hovered round 120 yen. The firm is forecasting a internet lack of 4 billion yen for the fiscal yr ending August 2026, marking its eighth consecutive annual loss.
Analysts say the supply enterprise has lengthy suffered from structurally weak profitability as a result of excessive labor prices for securing drivers, heavy spending on promotions and coupons, and intense competitors for customers.
Even in the course of the pandemic, when demand surged, Demae-can remained deep within the purple. In the fiscal yr ending August 2020, the corporate’s gross sales rose 54% year-on-year, but internet losses expanded sharply to round 4.1 billion yen.
The enterprise mannequin itself stays difficult as a result of supply platforms usually depend on markups added to restaurant menu costs to generate income. However, aggressive strain has begun eroding that pricing construction.
Industry observers level to the arrival of Rocket Now in January 2025 as a serious turning level. Operated by a gaggle firm of South Korean e-commerce large Coupang, the service aggressively promoted same-price ordering, permitting prospects to buy meals on the identical value charged in shops.
The technique intensified competitors throughout the sector, forcing rivals to reply. Demae-can itself launched a same-price ordering system in some areas from September 2025.
Companies are actually more and more providing free supply and eliminating menu markups in an try to draw prospects, although somebody inside the ecosystem should finally soak up these prices.
The business seems to be following a well-known platform technique by which corporations prioritize increasing market share first, then try to boost costs or monetize customers later as soon as buyer loyalty is established.
Even Uber Eats, broadly considered as one of many stronger gamers within the sector, nonetheless faces uncertainty over whether or not its supply operations alone can stay sustainably worthwhile.
However, Uber Technologies has succeeded in bettering profitability on the group stage by increasing far past meals supply. The firm reported adjusted EBITDA of three.6 billion {dollars} from its supply phase in 2025, up roughly 45% from the earlier yr.
Unlike Japanese rivals targeted totally on meals supply, Uber has diversified into ride-hailing, freight transportation, journey partnerships, and promoting inside its app ecosystem. Restaurants also can pay to advertise themselves to customers shopping the app, creating further income streams past supply charges.
Analysts say scale is turning into more and more essential within the business, giving international operators equivalent to Uber a serious benefit.
For Demae-can, attainable future choices may embrace restructuring, privatization beneath mother or father firm LINE Yahoo, or focusing extra closely on smaller impartial eating places that international opponents could overlook.
Still, business watchers count on the value conflict and market consolidation to proceed, with weaker operators more likely to disappear because the battle more and more turns into one among monetary endurance.
Source: Kyodo