DoorDash’s Andy Fang on Global Expansion and Post-Pandemic Delivery
DoorDash, which went public in December, has undoubtedly benefited from food delivery trends over the past year. Shares of the company started trading at $ 182 per share on December 9, 2020, and although they have seen highs and lows since then, shares are up about 24%.
Building on this momentum, the two-time company CNBC Disruptor 50 is embarking on alcohol delivery – not to mention its multitude of plans for international expansion. At the heart of these plans is co-founder and CTO Andy Fang, who leads the engineering team and is responsible for the overall product vision, technology roadmap and architectural direction of the platform. DoorDash. Andy holds a BS in Computer Science from Stanford University, where he met co-founders Tony Xu and Stanley Tang and the concept of DoorDash was born.
CNBC recently spoke to Fang, who said groceries, convenience, alcohol, flowers and gifts are becoming paramount for the company’s platform offerings, as international opportunities abound. .
The following questions and answers have been modified for length and clarity.
CNBC: What consumer behaviors persist as we move towards a post-pandemic world? Are people ordering more than they were before the pandemic?
Fang: Yes, there are more consumers than ever using DoorDash, ordering more delivery than they were before Covid-19 – but notably, they continue to order at higher rates, even in the face of reopenings. We continued to set new records for orders on our platform and order value in our marketplace as order rates among new and existing customers continue to exceed pre-Covid averages. It also means that we have been able to create more economic opportunities for traders and Dasher.
We know consumer behavior is sticky, with recent studies showing that a majority of consumers plan to continue having food delivered to restaurants as much, if not more, when the pandemic subsides. Beyond restaurants, however, we see our continued expansion into new verticals as a key driver of consumer engagement. Orders for categories other than restaurants, including grocery, convenience, alcohol, flowers and gifts, increased 40% between the end of 2020 and the end of the first quarter of 2021. In addition , new and improved DoorDash product components, such as DashPass, our subscription service, and DoubleDash, our multi-merchant item bundle offering, continue to provide consumers with even more choice and convenience.
CNBC: I know DoorDash was recently launched in Japan and rumor has it that it is considering Europe next – How does the possibility of third-party delivery abroad compare to the possibility in the United States?
Fang: Our mission at DoorDash is to strengthen local economies, and although we started in the United States, we have always been intent on expanding our impact and delivering value to merchants, consumers and Dasher. In other countries.
Internationally, just like in the United States, we saw a great opportunity to provide merchants with new tools and products that help them increase their sales. At the start of the pandemic, more than 40% of merchants did not have an online channel to reach customers, and we know that now more than ever, driving online sales is essential for these businesses.
From setting up an online store for direct ordering, pickup and delivery, to implementing white label deliveries, we know that by introducing more merchants to the services we offer, we can support them. way of doing business and helping to enrich neighborhoods around the world. The opportunity before us is vast, and as we delve into the unique needs of each new country we enter, we continue to be excited about the impact we can have for our stakeholders there. .
CNBC: Can you tell me more about the early days of DoorDash? Were there any difficult times when you felt the business was not going to be successful?
Fang: Every industry has its ups and downs, but I think this was especially true for last mile logistics and on-demand delivery space. When we first founded DoorDash in 2013, the investment community was enthusiastic. A few years later, around 2016/2017, many investors began to question whether players in this space could become profitable. As a result, we struggled to raise capital and ended up lifting a downward turn. Because we were less well funded than our peers, we had to be very disciplined about how we allocated capital while trying to grow as a business. Fortunately, these difficult times have forced us to reinvent the way we operate and be smarter than ever.
Many of DoorDash executives today were with the company during this time and maintain the same pragmatic determination that got us through then. The experience of these dips has made us a stronger and more disjointed team. The focused and careful judgment that we have relied on for success is then part of DoorDash’s DNA, as well as preparing us to better overcome the challenges that have arisen since then (and which are yet to come).
CNBC: After leading the development of DoorDash’s logistics network across the United States, can you tell us more about this process and how you plan to expand this logistics network into new markets?
Fang: Building the DoorDash logistics network has been a huge effort, and it’s an ongoing effort across our business today. On the one hand, it’s really an exercise in capturing every detail possible about the physical world – Where are the open parking spaces on Main Street? How long does it take to cook a pizza? How long will a pint of ice cream stay cold? – while balancing the dynamics of a three-sided market.
As we continue to grow, we are thinking about how we can maintain flexibility and meaningful earning opportunities for Dashers, continue to provide the greatest possible coverage to merchants, and still ensure that consumers receive their orders efficiently. Balancing these priorities is an interesting challenge, and things only get more complex as we take into account different geographies, vehicle types and societal norms. The logistical considerations for a dense urban city like Chicago or New York are different from those of a suburban area like Palo Alto, Calif., Where we started. And in Japan, where the majority of Dasher deliveries by bicycle rather than by car, we can suggest different delivery routes or offer different bags to transport the goods to their final destination.
On top of all of this, we also know that consumer expectations have changed over the past eight years since our inception, and that overall people want to access more things, faster. That expectation has only grown during the pandemic as more people are exposed to the benefits and conveniences of on-demand delivery and pickup.
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