Sat. Jan 22nd, 2022

There’s an old joke, and we paraphrase, that “in the end, all internet businesses become advertising businesses”. Well, maybe we should add “and lending businesses” now.

Check it out Tuesday piece by Bloomberg:

Delivery Hero SE wants to expand new business offerings, including selling ads and allowing consumers to defer payments on purchases, both of which can help the company grow sales as it moves closer to profitability.

The company deployed a buy-now-pay-later service in the Middle East and North Africa as part of a test, chief financial officer Emmanuel Thomassin said in an interview on Tuesday. Delivery Hero also wants to make better use of its platform to grow advertising sales, he said.

The piece added:

Delivery Hero is also looking to expand its financial technology offerings, such as providing financing to sellers in partnership with banks.

That’s € 22 billion, Germany-based global food delivery company Delivery Hero, aiming to break even (finally!) In the second half of the year, and propose to grow their core business by, in effect, a mix of eye catching and financial engineering. . If your customer can not afford larger meals, finance it. If your suppliers can not get the credit for expanding their kitchens, do so too.

In a way, it’s not that different from what Amazon has been doing for the past decade. You can now get an Amazon credit card, and as a provider, Amazon will cover your warehouse costs in exchange for a reduction in revenue. It also, surprisingly, now allows targeted advertising on its retail platform that has generated about $ 8 billion in revenue last term.

But while Amazon offers a wide range of products – appealing to advertisers – with benefits such as credit card refunds – appealing to consumers who want to fix their spending – it’s hard to see what it might be like to move a needle for a technology-enabled meals on wheels business. The only other people who might be advertising on Delivery Hero’s platform are other restaurants that, even in affluent metropolitan areas like San Francisco, largely still struggling to make money of gig economy services. Will a consumer then really take credit to buy another pilau rice? Well, maybe.

And as for restaurants where the use of Delivery Hero makes a profit, why not fund extra kitchen space from those earnings instead of taking on burdensome partner credit instead?

Many questions. But since the gig economy as a whole has yet to establish its credentials as a sustainable one, it may be a sign that, if these businesses want to survive and thrive, they need to start finding another way to make money outside the infamous difficult world of last mile delivery.

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