t

os
W17193

DELIVERMEAL IVORY COAST: ADDRESSING HEADQUARTERS’

rP
DEMANDS

Benoit Decreton, Professor Phillip C. Nell, and Alison E. Holm wrote this case solely to provide material for class discussion. The
authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised
certain names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights

yo
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Copyright © 2017, Richard Ivey School of Business Foundation Version: 2017-03-28

It was a Sunday evening in the dry season, and Melanie Finet was on the dusty roads heading back to
Abidjan in Côte d’Ivoire (Ivory Coast). She had spent the weekend with other French expatriates in
op
Assinie-Mafia, a former French colonial city known for its beaches. The calm of the house where they
were staying by the sea had been very relaxing. Yet, she could feel the stress rising as she started thinking
about the problems that she still needed to solve at the Ivorian subsidiary of DeliverMeal. She had joined
DeliverMeal Ivory Coast two months before as business development manager, after graduating from the
London School of Economics in June 2015.
tC

DeliverMeal had been founded in 2010 in Oslo, Norway, and operated an online platform specializing in
the home delivery of restaurant meals. The Ivorian subsidiary was almost two years old and was the
fourth DeliverMeal subsidiary on the African continent. DeliverMeal’s headquarters had already gained
considerable experience in opening subsidiaries in emerging markets (for example, India, Croatia, and
Malaysia). Headquarters’ managers used their experience in other emerging markets to build standard
platforms that they hoped would scale rapidly across the globe. However, this time, the local environment
seemed much different. As a result, headquarters’ requests were sometimes at odds with the local
No

environment in Ivory Coast.

Finet was remembering her last call with Jim Taylor from the headquarters, and the different points she
had to clarify for their weekly call the next day. She decided to get some sleep before diving into these
challenges.

BACKGROUND INFORMATION ON THE E-COMMERCE INDUSTRY

Do

The e-commerce industry was a considerable market, with retail e-commerce sales worldwide exceeding
$1.6 trillion1 in 2015, up 25.1 per cent from 2014.2 While global growth was expected to remain at

1
All currency amounts are in US$ unless otherwise stated.
2
“Worldwide Retail Ecommerce Sales: eMarketer’s Updated Estimates and Forecasts Through 2019,” eMarketer, 2015,
accessed February 10, 2017,
www.emarketer.com/public_media/docs/emarketer_etailwest2016_worldwide_ecommerce_report.pdf.

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 2 9B17M048

t
double-digit rates for some time, analysts foresaw the rise slowing down a bit and dropping to about 19

os
per cent in 2019.3

The industry concentration differed widely between regions. For example, about 80 per cent of the market
in China in 2013 was occupied by one player,4 while the top 10 retailers accounted for only 37 per cent of
the market in Europe and for about 50 per cent in the United States and Latin America.5 Key players in

rP
the industry included companies that had embraced online sales as a complement to their other activities
(also called brick and mortar), such as Apple (United States), Walmart (United States), Otto (Germany),
Tesco (United Kingdom), and Casino (France), as well as pure-play e-commerce firms such as Amazon
(United States), eBay (United States), Alibaba (China), Rakuten (Japan), and Cdiscount (France).

E-commerce sales were unevenly distributed across the globe, with North America accounting for 33 per
cent of total sales in 2014, followed by Asia-Pacific and Western Europe, with 31 per cent and 25 per

yo
cent, respectively. Other regions were lagging behind, such as the Middle East and Africa, accounting for
only 2 per cent of total sales in 2014 (see Exhibit 1).6

Customer habits varied tremendously across regions. For example, in 2012, preferences in method of
payment were significantly different across the globe, with 48 per cent of online transactions paid by cash
on delivery in Africa and in the Middle East, but only 11 per cent in Asia-Pacific, 8 per cent in Latin
America, 5 per cent in Europe, and 1 per cent in North America (see Exhibit 2).7
op
Online food orders represented a minor but growing fraction of the e-commerce industry. The total
takeout and delivery market was estimated to be about $70 billion, from which 13 per cent was online.8
Analysts also forecasted that online food ordering would surpass offline food ordering no sooner than
2022.9

Some of the market players, such as Just Eat, Delivery Hero, and Grubhub, only partnered with
tC

restaurants that had their own fleet of meal delivery couriers.10 Others, like Deliveroo, used carriers to
deliver food only from restaurants that did not have a takeaway option (see Exhibit 3).11 New players
from other industries had started entering the online food delivery market, such as Uber with UberEATS12
and Amazon via Prime Now.13

3
Ibid.
4
Mark Brohan, “West Meets East,” Internet Retailer, February 27, 2014, accessed February 10, 2017,
No

www.internetretailer.com/2014/02/27/west-meets-east.
5
“Unlocking the Potential of E-commerce for Developing Countries,” UNCTAD, March 2015, accessed February 10, 2017,
http://unctad.org/en/PublicationsLibrary/ier2015_en.pdf.
6
“Worldwide Retail Ecommerce Sales: eMarketer’s Updated Estimates and Forecasts Through 2019,” 2015, eMarketer,
accessed February 10, 2017,
www.emarketer.com/public_media/docs/emarketer_etailwest2016_worldwide_ecommerce_report.pdf.
7
“Your Global Guide to Alternative Payments,” worldpay, 2014, accessed February 10, 2017,
http://offers.worldpayglobal.com/rs/worldpay/images/worldpay-alternative-payments-2nd-edition-report.pdf.
8
Eric Kim, “A Secular Shift to Online Food Ordering,” TechCrunch, May 7, 2015, accessed February 10, 2017,
https://techcrunch.com/2015/05/07/a-secular-shift-to-online-food-ordering.
9
Ibid.
Do

10
Martin Mignot, “The Billion Dollar Food Delivery Wars,” TechCrunch, July 11, 2015, accessed February 10, 2017,
https://techcrunch.com/2015/07/11/the-billion-dollar-food-delivery-wars/.
11
“About Deliveroo,” Deliveroo, accessed February 10, 2017, https://deliveroo.co.uk/faq#whatisdeliveroo.
12
Matthew Sparkes, “Uber Launches Food Delivery Service in Barcelona,” The Telegraph, February 20, 2015, accessed
February 10, 2017, www.telegraph.co.uk/technology/news/11424981/Uber-launches-food-delivery-service-in-
Barcelona.html.
13
Sarah Perez, “Amazon Launches a Food Delivery Service via Prime Now, Starting in Seattle,” TechCrunch, September 8,
2015, accessed February 10, 2017, https://techcrunch.com/2015/09/08/amazon-launches-a-food-delivery-service-via-prime-
now-starting-in-seattle/.

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 3 9B17M048

t
The leader in emerging markets was foodpanda (also called Jumia Food), a Rocket Internet company. It

os
was the market leader in 31 of the 40 countries in which it was present (including Bangladesh, Indonesia,
Brazil, and Ghana), and it had about 2.3 million users and 13 million orders in 2014.14 E-commerce in
emerging markets remained particularly challenging, and many firms had closed down their activities
after only a few years. This was the case for foodpanda in Vietnam.15

rP
BACKGROUND ON DELIVERMEAL

DeliverMeal had been successful since its inception, including in emerging markets such as Pakistan and
Bulgaria. Headquarters’ managers’ experience in emerging markets gave them confidence in their ability
to do business in what they considered difficult environments. DeliverMeal followed a global strategy in
which standardized processes and turnkey solutions were transferred from the global headquarters to the

yo
subsidiaries. As such, the subsidiaries had a clear implementation function.

The revenue structure of DeliverMeal worked as follows: DeliverMeal negotiated a commission that
restaurants would pay to appear on the DeliverMeal website. Then, customers ordered via the website, the
app, or by phone, and DeliverMeal communicated the orders to the restaurants. DeliverMeal then sent
employees to pick up and deliver the orders to the clients. Payments were made upon delivery and
included an additional delivery fee. In sum, the online platform generated revenue with fees from the
restaurants and from the customers, while the costs were related to operating the online platform, finding
op
partners and negotiating the contracts, managing online and offline marketing, transferring the orders, and
delivering the meals, plus other fixed costs, such as office rent.

The selection of managers for the different subsidiaries was conducted by headquarters’ managers.
Subsidiary heads were often third-country nationals, such as French staff for French-speaking African
countries. Other employees were hired by the subsidiary’s managers directly and were generally local
tC

staff.

DELIVERMEAL IN SUB-SAHARAN AFRICA

Although widely developed in other parts of the world (e.g., Europe and Asia), the online food delivery
industry was still nascent in Sub-Saharan Africa. DeliverMeal was the first company to enter the market
No

in Ivory Coast, and there had been no new entrants so far. The industry was slowly starting to take off,
and the only competitors for DeliverMeal were the restaurants’ own delivery systems. The advantage that
DeliverMeal had over these was that it was a communication platform that listed several restaurants in
different categories (e.g., local, French, Italian).

The management team of DeliverMeal Ivory Coast consisted of the general manager, Anna Blanchard, a
French national; the marketing manager, Serge Ibori, an Ivory Coast national; and Melanie Finet. When
Finet started working for DeliverMeal Ivory Coast, there were eight employees in addition to the
management team. Among those eight employees, three had left and had been replaced within the past
Do

two months.

14
“Building out the Global Leadership in Online Takeaway,” Rocket Internet, March 2015, accessed February 10, 2017,
https://www.rocket-internet.com/sites/default/files/files/Mar%202015%20Business%20Update%20-
%20Global%20Online%20Takeaway%20Group.pdf.
15
Judith Balea, “It’s Confirmed! Foodpanda Quits Vietnam,” Tech in Asia, December 3, 2015, accessed February 10, 2017,
https://www.techinasia.com/confirmed-foodpanda-quits-vietnam.

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 4 9B17M048

t
The target group of DeliverMeal included the wealthy part of the population in Abidjan, such as high-

os
income local professionals and expatriates. Customers sought convenience and were willing to pay a
premium price for home-delivered food rather than eating in restaurants. As such, the market remained a
niche with a relatively narrow customer base.

The institutional context of Ivory Coast made it particularly challenging for DeliverMeal to manage its

rP
operations. In 2015, the ratio of the population that had mail delivered at home was approximately four
times lower in Africa than in Asia or Europe.16 That same year, Internet penetration in Ivory Coast
reached only 21 per cent, as opposed to 50 per cent in East Asia and Pacific and 72 per cent in Europe and
Central Asia.17 Data from the World Bank also indicated that the ratio of paved roads was among the
lowest of all countries at 7.9 per cent, far from the 92 per cent of the European Union or even the 59 per
cent of South Asia.18 Other studies on Ivory Coast showed that it remained extremely time-consuming
and costly to resolve a commercial dispute through a local first-instance19 and that informal economy
practices and verbal agreements were still widespread.20 This situation made contract enforcement a

yo
delicate issue for DeliverMeal Ivory Coast.

For the e-commerce industry, growth was very important in the early years of a firm, sometimes even
more so than revenue.21 As such, the scalability of a platform was crucial to allow for rapid expansion and
customer acquisition. This was also the logic shared by many of the managers in the headquarters, who
pushed for a performance-driven culture in which implementation and growth were rapid.
op
ADDRESSING HEADQUARTERS’ DEMANDS

Finet was preparing the weekly meeting with the management team of DeliverMeal Ivory Coast as the
cab taking her to work was stuck in traffic. Besides daily operational issues, she was concerned about
several demands by headquarters that the team had to address. Finet had already discussed these demands
tC

informally with the team and she now needed to make reasonable suggestions to Taylor on how to
proceed.

The headquarters requested that the subsidiary delete its phone number from all the communication
materials in order to push customers to order online. In fact, although orders could be placed via the app,
through the website, and by phone, the vast majority of customers ordered by phone. Receiving these
calls was an extremely time-consuming and resource-demanding process, especially when compared with
No

how fast and efficient the process could be if customers ordered online. The headquarters had been
successful in pushing this initiative in other markets, for example in Asia, and now wanted to do the same
with the African subsidiaries. Finet thought about what Blanchard, the country general manager, had told
her about this demand by headquarters:

16
“2015 Results,” Universal Postal Union, 2015, accessed February 10, 2017, www.upu.int/en/resources/postal-
statistics/2015-results.html.
17
“Internet Users (per 100 People),” World Bank, accessed February 10, 2017,
http://databank.worldbank.org/data/reports.aspx?source=2&series=IT.NET.USER.P2.
Do

18
“Paved Roads (% Total Roads),” World Bank, 2011, accessed September 16, 2016,
http://databank.worldbank.org/data/download/archive/WDIandGDF_excel_2011_09.zip.
19
“Enforcing Contracts,” World Bank, June 2015, accessed February 10, 2017,
www.doingbusiness.org/data/~/media/WBG/DoingBusiness/Documents/Methodology/Data-Corrections/DB16-corrections.xlsx.
20
“Recognizing Africa’s Informal Sector,” African Development Bank Group, March 27, 2013, accessed February 10, 2017,
www.afdb.org/en/blogs/afdb-championing-inclusive-growth-across-africa/post/recognizing-africas-informal-sector-11645.
21
“Rocket Internet Portfolio Companies Show Continued Growth and Improvement in Profitability in 2015,” Rocket Internet,
April 14, 2016, accessed February 10, 2017, https://www.rocket-internet.com/sites/default/files/investors/2016-04-
14%202015%20AR%20and%20CMD%20PM_EN_vF.pdf.

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 5 9B17M048

t
Blanchard didn’t seem to agree with Taylor’s idea. She told me that a lot of our good clients only

os
had our phone number, and that they refused to use the website to place their orders because they
either didn’t have the Internet or they didn’t really want to start looking at it because they
wouldn’t have known how to use it. She thinks we should keep the phone number there and not
plan to remove it.

rP
Finet also thought that this initiative from headquarters was particularly bold. It had not been easy to gain
customers, and Finet knew that most of them were unwilling to order online. What would happen if
DeliverMeal told its customers that they could not order by phone anymore? On the one hand, complying
with the headquarters’ demand would improve the operational side of the ordering process. Customer
service staff would not have to take the orders by phone and could manage a higher number of orders.
Also, there would be fewer errors compared to when customers ordered by phone. On the other hand,
Finet knew that this demand by headquarters conflicted with local habits (see Exhibit 4). She felt that the

yo
market was not ready for online ordering and that the number of daily orders would be strongly reduced if
the firm decided to stop offline ordering.

A second request Taylor had made was that wine dealers be included in DeliverMeal’s client portfolio. As
DeliverMeal Ivory Coast was not reaching headquarters’ expectations in terms of partner acquisition,
Taylor thought of diversifying the portfolio with other kinds of partners. Working with wine dealers
would be an interesting addition, as the target group of DeliverMeal largely consisted of enthusiastic wine
drinkers. However, the managers later faced an issue that they had not anticipated. When discussing with
op
the local delivery staff, Finet found that half the staff refused to transport alcohol, due to religious
reasons. It then became rather obvious that it would be extremely complicated to organize the pick-up and
delivery of wine. It would be practically impossible to ensure that the right delivery employee would be
available for transporting alcohol, as the delivery employees came and went once an order had to be
picked up. In addition, DeliverMeal did not believe in hiring additional staff based on their religious
beliefs. Nevertheless, if DeliverMeal did not comply with this demand by headquarters, Finet and her
tC

team would probably have to find a solution to increase the number of partners in order to convince
headquarters that adding wine dealers was not critical to success.

Third, Taylor was pushing to get every subsidiary to upload a signed contract for every partner listed on
the website. The problem facing DeliverMeal Ivory Coast was that it had not signed a contract with a lot
of its partners. Finet reflected on the difficulties that DeliverMeal Ivory Coast was facing with regard to
contract negotiations with local partners:
No

I only found about 60 per cent of the paper versions of the contracts I needed. Blanchard told me
that some restaurants did not have contracts because they had verbal agreements. She explained
that many restaurants didn’t want to sign contracts, and that she tried to get them to sign, but each
time she went, they refused.

This demand by headquarters was not new, but it proved extremely difficult for the team in Ivory Coast to
address it. Initially, after some more trials with local partners, the team decided not to upload any of the
contracts. However, the headquarters’ managers were monitoring the implementation of this demand
Do

across the different subsidiaries and they contacted the Ivorian team to check on its progress. Blanchard
tried to explain that getting the partners to sign was difficult, but she received a rather straightforward
email from Taylor, leaving little room for negotiations: “Signed contracts or nothing!”

Finet was puzzled. One way of addressing this demand would be to find another way of signing the
contracts. Still, forcing the partners to sign contracts felt rather strange. Finet thought that it would not do

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 6 9B17M048

t
much for DeliverMeal Ivory Coast, apart from worsening its relations with the partners. She had

os
previously thought about the argument that getting the subsidiary’s commissions from the partners would
be easier if the partners had signed contracts, but she also remembered that contract enforcement was not
the same in Ivory Coast as in France. She actually had experienced cases where the partners did not
respect the terms of the contracts and argued about the validity of the contracts. Nonetheless, not
complying with the demand from headquarters seemed dangerous for the relationship between the

rP
subsidiary and the headquarters.

Preparing her notes for the meeting, Finet thought about what Ibori, the marketing manager, who had
been with the team for more than a year, had told her regarding the need to satisfy the headquarters’
marketing directives and the local partners at the same time: “I need to satisfy . . . or maybe not satisfy,
but everyone comes with reasonable arguments, so it’s not always easy.”

yo
“Indeed, it’s not always easy: it’s often rather complex,” Finet thought. She wondered whether all these
challenges were particular to DeliverMeal or whether another online food delivery platform would
experience the same difficulties when doing business in such an environment.

Little time was left until Finet had to call Taylor and provide him with her suggestions regarding these
three demands by headquarters.
op
The authors would like to thank the Competence Center for Emerging Markets and CEE at the WU Vienna University of
Economics and Business for its help with this case.
tC
No
Do

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 7 9B17M048

t
EXHIBIT 1: BUSINESS-TO-CONSUMER E-COMMERCE WORLDWIDE DISTRIBUTION IN SELECTED

os
REGIONS

rP
yo
op
Source: Created by the authors using data from “Worldwide Retail Ecommerce Sales: eMarketer’s Updated Estimates and
Forecasts Through 2019,” eMarketer, 2015, accessed February 10, 2017,
www.emarketer.com/public_media/ docs/emarketer_etailwest2016_worldwide_ecommerce_report.pdf.

EXHIBIT 2: PREFERRED METHOD OF PAYMENT FOR ONLINE TRANSACTIONS IN 2012

tC
No
Do

Source: Created by the authors using data from “Your Global Guide to Alternative Payments”, WorldPay, 2014, accessed
February, 10, 2017, http://offers.worldpayglobal.com/rs/worldpay/images/worldpay-alternative-payments-2nd-edition-
report.pdf.

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 8 9B17M048

t
EXHIBIT 3: MAIN EUROPEAN ONLINE FOOD DELIVERY COMPANIES BY TOTAL FUNDING

os
Company Description Total funding

Just Eat London-based network of restaurant delivery sites, founded $3,825M

in Denmark in 2001
Delivery Hero Berlin-based network of restaurant delivery sites, founded in $1,300M

rP
2011
foodpanda Berlin-based network of restaurant delivery sites working $218M
with its own couriers and contractual ones, founded in 2012
Deliveroo London-based network of restaurant delivery sites working $29.6M
with its own couriers, founded in 2012
Take Eat Easy Brussels-based network of restaurant delivery sites working $6.8M
with contractual couriers, founded in 2013

yo
Resto-In Paris-based network restaurant delivery sites working with $1.8M
its own couriers and contractual ones, founded in 2006
Meals.co.uk Bristol-based network of restaurant delivery sites working $0.8M
with its own couriers, founded in 2013

Note: M = million
Source: Created by the authors using data from “Europe’s Food Home Delivery Market Hots Up,” Informilo, June 9, 2015,
accessed February 10, 2017, www.informilo.com/2015/06/europes-food-home-delivery-market-hots-up/; company websites.
op
tC
No
Do

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 9 9B17M048

t
EXHIBIT 4: PHONE AND INTERNET CONNECTIVITY

os
rP
yo
op
tC
No

Source: Created by the authors using “Mobile Cellular Subscriptions (per 100 People),” World Bank Data, accessed
Do

February 10, 2017, http://databank.worldbank.org/data/reports.aspx?source=2&series=IT.CEL.SETS.P2; “Internet Users

(per 100 People),” World Bank Data, accessed February 10, 2017,
http://databank.worldbank.org/data/reports.aspx?source=2&series=IT.NET.USER.P2

This document is authorized for educator review use only by Carlo Zevallos, Universidad de Ingenieria y Tecnologia UTEC until May 2025. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860