Momentum Works has released a new report on East Asia’s food delivery sector, arguing that the region is entering its biggest leadership shift in more than a decade as Delivery Hero’s acquisition-led expansion model comes under pressure from Asian operators with deeper operating playbooks.
The Singapore-headquartered venture outfit said in its “Food Delivery Platforms in East Asia 2026” report that Hong Kong, Taiwan, South Korea and Japan generated an estimated US$38.6 billion in food delivery platform gross merchandise value in 2025. South Korea accounted for US$28.3 billion, or about 73 per cent of the total. Japan, Taiwan and Hong Kong generated US$4.1 billion, US$3.6 billion and US$2.6 billion, respectively.
Also Read: How mobile marketing is powering the next phase of food delivery growth in Southeast Asia
The headline finding is not simply market size. Momentum Works argues that East Asia shows how food delivery penetration is shaped less by income, urban density or restaurant culture alone, and more by how aggressively operators build supply, manage subsidies, improve logistics density and integrate delivery into broader consumer ecosystems.
That matters for Southeast Asia because the region’s dominant delivery platforms — particularly Grab, GoTo’s Gojek, ShopeeFood and LINE MAN Wongnai — face similar questions around profitability, competitive intensity and regulatory scrutiny. Google, Temasek and Bain estimated Southeast Asia’s online transport and food segment at US$28 billion in gross merchandise value in 2023, making it one of the region’s largest internet economy verticals. But growth has increasingly shifted from land-grab spending to unit economics, cross-selling and ecosystem retention.
Delivery Hero’s Asia model hits limits
For years, Delivery Hero built one of the broadest delivery portfolios in Asia by acquiring local leaders and consolidating fragmented markets. That approach gave the German company meaningful positions in Hong Kong, Taiwan and South Korea, while it also operated in Japan before exiting the market.
Momentum Works argues that this model is now reaching an inflexion point. Foodpanda Taiwan is being sold to Grab, Baemin in South Korea is on the market, foodpanda has lost leadership in Hong Kong, and Delivery Hero has already pulled out of Japan.
The issue is not that acquisitions failed to create scale. In several markets, they did. The problem is that consolidation alone has proved insufficient against rivals that continue to invest in operational depth. These competitors are not merely buying share; they are shaping demand through pricing architecture, merchant density, rider efficiency, subscription programmes and adjacent services.
“People often assume food delivery success is determined by how developed a market is. East Asia shows that isn’t true,” said Jianggan Li, CEO of Momentum Works. “These four markets look remarkably similar on paper, yet their outcomes are completely different. Market readiness is only the precondition. But markets don’t grow by themselves; operators’ relentless push grows markets.”
Also Read: SEA’s food delivery wars heat up: Market hits US$19.3B as TikTok enters arena
That point is visible in the stark difference between Japan and South Korea. Both are wealthy, urbanised and have sophisticated foodservice sectors. Yet Momentum Works estimates food delivery penetration at around 3 per cent in Japan, compared with more than 20 per cent in South Korea.
Keeta’s Hong Kong lesson
Hong Kong offers the clearest example of how an aggressive entrant can change a market that once appeared settled.
Meituan’s Keeta entered Hong Kong in 2023 and focused on subsidised one-person meals, rapid merchant onboarding and network density. Within 29 months, according to Momentum Works, it became profitable and overtook foodpanda. The report says Keeta shifted the battleground from blanket subsidy spending to operational efficiency, a familiar pattern for Meituan, which endured years of intense competition in mainland China before expanding overseas.
The Hong Kong case is relevant to Southeast Asia because it shows that incumbent delivery positions can be vulnerable even in dense, high-income cities. Singapore, Bangkok, Jakarta and Ho Chi Minh City all have entrenched players, but the economics remain sensitive to fee structures, rider supply and restaurant participation. A well-capitalised entrant with a sharper single-market playbook can still unsettle the hierarchy.
Keeta’s expansion is also being watched because Meituan has become one of Asia’s most sophisticated local services platforms. Globally, its closest reference points are not only food delivery peers such as Uber Eats, DoorDash and Deliveroo, but also superapp ecosystems that use delivery to reinforce broader consumer frequency.
Taiwan gives Grab a test outside Southeast Asia
Taiwan may be the most important market in the report for Southeast Asian readers because of Grab’s planned acquisition of foodpanda Taiwan. Momentum Works describes Taiwan as a profitable but comfortable duopoly where food delivery penetration has been stuck around 10 per cent for years and growth slowed to 5.5 per cent as competitive pressure faded.
Taiwanese regulators blocked Delivery Hero’s earlier attempt to sell foodpanda Taiwan to Uber Eats, reflecting the antitrust concerns that now surround food delivery consolidation across Asia. Grab’s entry therefore raises a different question: whether a Southeast Asian operator can reignite growth in a mature North Asian market rather than simply inherit an existing platform.
Grab’s experience is relevant. In Southeast Asia, it has fought Gojek, ShopeeFood, Foodpanda and local challengers across markets with different labour rules, payment habits and restaurant structures. It has also pushed delivery towards profitability by bundling services with mobility, financial products, subscriptions and advertising.
Still, Taiwan will not be a simple replication of Singapore or Malaysia. Consumer expectations, merchant relationships and regulatory treatment of platform labour differ. Grab will need to prove that its regional operating muscle travels beyond its home geography.
Korea and Japan show two extremes
South Korea remains East Asia’s heavyweight. Its US$28.3 billion food delivery market was built on long-standing consumer habits rather than platform invention alone. Baemin, owned by Delivery Hero, remains the leader, but Coupang Eats has gained share by leveraging Coupang’s broader commerce, logistics and membership ecosystem.
That creates a strategic dilemma for any future owner of Baemin. The asset is large, but it competes against a company that can use grocery, e-commerce, payments and membership to subsidise frequency and deepen loyalty. The same ecosystem logic is increasingly visible in Southeast Asia, where Grab, GoTo and Sea Group all treat food delivery as part of a wider consumer stack.
Japan sits at the other end of the spectrum. Despite its density and wealth, food delivery penetration remains low. Convenience stores, affordable prepared meals and a deeply embedded solo-dining culture reduce the frictions that food delivery solves elsewhere. Coupang’s Rocket Now is testing whether affordable solo delivery can unlock demand, but Japan has repeatedly frustrated global and regional platforms.
Also Read: How mobile marketing is powering the next phase of food delivery growth in Southeast Asia
Momentum Works’s broader argument is that Asia’s next phase of food delivery competition will be led by operators shaped by difficult home markets, not by financial consolidators alone.
“Ownership changes the balance sheet. It doesn’t change the competitive dynamics,” Li said. “Whoever owns these assets will still have to compete against operators that have spent years learning how to win in highly competitive markets.”
For Southeast Asia, the message is direct. The food delivery market is no longer about who can buy the most assets or spend the most on discounts. The winners will be those that can build density, defend margins, manage regulators and turn delivery into part of a larger consumer ecosystem. East Asia is becoming the testing ground for that transition.
The post Food delivery’s old consolidation model is cracking in East Asia appeared first on e27.