DoorDash Faces Growing Concerns of Peak, but Downward Stabilization Expected

Structural Growth in the Food Delivery Market Supported by High Growth of New Categories

[Image source=AP Yonhap News]

[Asia Economy Reporter Gong Byung-sun] As governments around the world show little sign of imposing lockdown measures despite the resurgence of COVID-19, concerns are growing over the slowdown in growth of fresh food delivery company DoorDash. However, the securities industry predicts that since the delivery sector has already established itself, DoorDash is more likely to show a downward stabilization rather than a sharp collapse.

According to Samsung Securities on the 14th, DoorDash's second-quarter revenue recorded $1.24 billion (1.4495 trillion KRW), an 83% increase compared to the same period last year. This exceeded the market consensus forecast of $1.09 billion by 13.76%. Along with these strong results, DoorDash's stock price has risen about 10.54% since the beginning of this month.

However, concerns over a peak-out are growing, and DoorDash's stock price direction is expected to become unstable. The public is not taking the COVID-19 Delta variant seriously, and globally, there is a trend toward easing COVID-19 lockdown measures. Cities such as San Francisco have temporarily limited delivery fee caps to protect small self-employed businesses.

Nevertheless, the securities industry expects a downward stabilization rather than a sharp peak-out for DoorDash. Kim Jung-han, a researcher at Samsung Securities, explained, "The structural growth trend of the food delivery market and the high growth of new categories continue." In fact, DoorDash stated that orders in non-restaurant sectors such as convenience stores and fresh food are showing a remarkable increase.

In the mid to long term, the recent market news about the acquisition of grocery delivery company Instacart is also expected to be a momentum. On the 11th (local time), DoorDash attempted to acquire Instacart but reportedly failed to reach an agreement due to antitrust concerns from approval authorities. Researcher Kim said, "Using inorganic growth such as the acquisition of Instacart as a breakthrough is a sufficiently plausible scenario," adding, "If realized, the non-restaurant sector will expand significantly, enabling the construction of a stable portfolio."

This content was produced with the assistance of AI translation services.