ASX-listed electric two-wheel vehicle group Vmoto (ASX:VMT) looks perfectly placed to capitalise on the increased demand for low-operational cost, low-emissions electric food delivery vehicles.
Similar to the waistlines of western consumers, food delivery services have experienced enormous growth over the last decade.
By the end of 2019, the global revenues generated by restaurant-to-consumer and platform-to-consumer delivery are expected to reach US$105 billion, a 9.5 percent jump from 2018.
In Europe alone, food delivery services generated over US$12 billion in revenue, with the sector predicted to carry a compound annual growth rate of 9.5 percent YoY until 2023.
A host of factors have underpinned the growth of this sector. From the more obvious appeal of lower delivery costs and more variety, to the more left-field impact of streaming platforms like Netflix, a growing percentage of consumers are finding themselves content to dine in and leave the cooking to the professionals.
For Europeans, one of the biggest contributing factors has been the growth of fast food chains across the continent.
In North America, fast food accounts for an astonishing 44 percent of restaurant food sales, a figure more than double the average across European nations.
Forecasting by global restaurant industry consultancy Aaron Allen & Associates suggests Europe has begun to catch up.
The consultancy estimates that by 2022, eight of the largest Western European economies (Belgium, France, Germany, Italy, the Netherlands, Portugal, Spain, and the UK), will see their respective fast food revenues grow by more than US$10.3 billion.
This growth will further fuel the food delivery boom, as fast food venues, absent of a valued ‘dining experience’, are more commonly ordered in.
Impact on the delivery vehicle sales
With these trends in mind, it’s clear that delivery service providers are in for a bullish few years.
A spike in demand for delivery vehicles can already be observed in Europe, with 2018 figures showing motorcycle and scooter sales up 9.9 percent on 2017 figures.
Of these sales, the most significant subset was the sales of electric scooters and motorbikes, the variety frontrun by Vmoto.
While only accounting for 0.75 percent of two wheelers currently sold in Europe, in 2018 EV bike sales rose by an astonishing 81.5 percent.
With knowledge of this impending boom in Europe, Vmoto made the decision in early 2018 to shift its primary focus to the continent.
In addition to growing its YoY revenue by 30 percent, Vmoto established a wholly owned European subsidiary and distribution warehouse in the Netherlands.
Adding to its already extensive European distribution network, Vmoto last year announced further exclusive distributor deals in the Netherlands, Czech Republic, Sweden, Finland and Norway.
Vmoto’s Managing Director, Mr Charles Chen, commented on the company’s effort in Europe and continued expansion across the continent.
“ FY2018 saw Vmoto achieve record unit sales into international markets and a modest positive EBITDA, as our investment into international marketing and expansion of the Company’s European distribution network and European warehouse began to see results.”
With the European food delivery market heating up Vmoto looks ideally placed to capitalise, providing the wheels for a new generation of takeaway meals.
This content is produced by Star Investing in commercial partnership with Vmoto. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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