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How hungryhouse plans to beat Just Eat

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In the past ordering a takeaway could be a bit of a faff. Relying on the handfuls of paper menus stuffed through your door and having enough cash on you to pay the driver could make for a less than convenient experience.

But in the last few years online ordering portals have emerged, helping consumers discover what’s available in their area and pay online.

Most successful among these has been Just Eat, which was originally founded in Denmark but now does 70 per cent of its business in the UK and recently floated on the London Stock Exchange valued at £1.47bn.

But disruptive businesses always have to be on the look out for the challengers catching them up.

Enter hungryhouse, which was launched in 2006 but didn’t get the same early traction as its rival, despite an appearance on Dragon’s Den by its founders Tony Charles and Shane Lake in 2007.

Hungryhouse is now part-owned by global takeaway network Delivery Hero. After reaching profitability last September the firm is on march, buoyed by more than £100m of investment in its global parent in this year alone. 

New MD Scott Fletcher was appointed last year tasked with taking hungryhouse towards market leadership, something he admits will be a challenge.

“We’re not exactly in a leadership position at the moment,” he says. “They’re a bit bigger than us at the moment which is always challenging.”

It’s very difficult to change consumer habits, especially in a market like this. Improving their platform and expanding their coverage can help hungryhouse deliver a better service, but enticing customers away from a very similar rival which they are very familiar with would be very difficult to achieve.

But Fletcher says that’s not the strategy to aim for.

“We operate in the same market with the same product,” he says. “We don’t focus on stealing their customers, we focus on growing the market, and they’re doing the same.”

Fletcher estimates the whole takeaway market to be worth around £6.4bn, but that only 20 per cent of that is currently online.

“Just Eat has beaten us to here but they’ve been around longer with more funding,” he says. “But we’re a profitable company, we’re growing quickly and so the real race is from 20 per cent to 50 per cent – what percentage of orders each can get.

“The past is the past and they’ve run a very good operation but it’s getting more competitive than ever.”

To step up the contest hungryhouse plans to invest heavily both in marketing and improving the size of its partner network – especially in the regions.

“We’re very competitive and have very good coverage in London, and in the top 20 cities we’re pretty good. But we don’t have very good regional coverage,” he says.

Hungryhouse also plans to spend money on pushing people towards its mobile and tablet products. “They’re solid now but we’ve seen areas where they can be improved,” Fletcher says.

On its marketing strategy, he says it’s all about grabbing the consumer’s attention at the right time.

“What we do is make sure we’ve got an enticing offer when people are starting to get hungry,” he says. In practice this means scheduling advertising for around 6pm.

“We’ve been growing quite solidly since announcing profitability in the UK,” Fletcher adds. “But what we really want to do is take it to the next level, so really accelerate that growth and ensure we’re much more visible on the street, have a top class reliable product and ensure it’s really easy for customers to use.”

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