Yogiyo, the Korean food delivery platform launched by Team Europe has flicked the “on” switch today. The Delivery Hero spin-off is headed up by Ludolf Ebner-Chung, the German-Korean McKinsey grad testing the waters in this new territory. We talk to Ebner-Chung to find out why all eyes are on Korea…
Your German-Korean heritage places you incredibly well for heading up this expansion – do you think that one of the biggest challenges for foreign investment teams is finding the right personnel?
LEC: Absolutely! If you have such a big time-difference and distance you need to rely on the right person and trust between the HQ management and the local person is really key. I don’t think tight KPI management works over such a far distance.
Additionally, one of the key elements of the incubating business-model is knowledge transfer. When I say that, I mean that you need to leverage all those positive and also negative experiences that you have made in other markets worldwide, so you become faster in your local market by making the right decisions and also avoiding time-consuming mistakes.
That’s the beauty of the incubator: you don’t have to do that much of trial and error compared to a totally independent startup. Sometimes this reminds me of my time with McKinsey where we had these vast global knowledge networks, for documents, experts and industry/company contacts.
Why is Team Europe entering Asia-Korea now?
LEC: Korea is vibrating quite strongly these days. We have seen some very impressive growth companies around ten years ago, then it was rather quiet for almost a decade and now it’s shaking and boiling again. I can’t really say where is the starting-line, but probably the success of social commerce starting around two years ago is a good reference.
This and the success of the iPhone and the pick-up in smartphone penetration have really created such a dynamic setting that we thought it is a good time to be present here. Considering that we are mostly an internet-focused business-builder Korea offers quite a good setting, industry-wise, but also geographically.
Do you think the great internet and mobile infrastructure in Korea means that the territory is ripe for large internet rollouts?
LEC Absolutely. While of course we have these large successful incumbents in many sectors like gaming, search, ad, commerce I think there are still quite a few areas where innovation or consolidation can take place.
Look at the various markets that just wait to be taken online, eg there is a huge demand for dating, wedding and marriage that is currently not online at all. I wonder which smart entrepreneur will start shaking this tree in the next couple of months…
What are the challenges in comparison to any other territory?
LEC Well, as mentioned understanding the local culture is very important. Asia is not Europe is not the US, and also within Asia, Korea has its own unique culture. From an online business perspective, customers expect you to be very quick and offer them excellent service. So we focus a lot of customer care and customer experience.
Will Yogiyo act as a litmus test for further Team Europe launches in the territory? What other types of companies would you be looking to start/incubate?
LEC Well, if only I knew at this point. I believe Yogiyo will do well, as Delivery Hero is doing well in all markets we started. Korea should prove to be successful. As for other investments, that’s really difficult to assess at this point, because it’s driven by what we have in our global portfolio and also what we can find and discover here on the ground. I still think that Cyworld should have had its $100bn IPO earlier than Facebook..haha
Online food delivery services seem to be taking off in Asia too, including the Rocket Internet’s Food Panda. Do you think that there is a “gold-rush” for new territories such as UAE, Korea etc?
LEC We checked the numbers and I think Southeast Asia offers a huge potential for online food delivery. Korea for us was more than just a decision for food delivery, we looked at it from an online/internet incubator perspective, where there are just so many different things to test out in a very connected technology- and smartphone-environment.
I’m not sure I would speak of a gold-rush, because setting up a scalable food-ordering platform is not that easy. Many people think of online food ordering as something similar to social commerce and that’s partly true. I remember during the social commerce boom in Korea there were almost 200 providers within just six months. However, the platform and the operations are very different for each model.
What do you think the Korean market will look like in five years’ time?
LEC As an incubator Korea will be a really exciting market to be in, because the opportunities will just grow and grow. I know there is this whole buzz about China, but I think that market is still in a much earlier development-stage in the online industries. For the online food-ordering business I think we will see a consolidated market, and Yogiyo will hopefully be one of the key players then
And finally – what German qualities and what Korean make a good businessperson?
LEC Structure and precision always help, but here in Korea you need to watch out that you don’t overdo it as a German. Emotions, feelings and good intuition sometimes count more than that.
Team Europe, founded in 2008 by Lukasz Gadowski and Kolja Hebenstreit, counts Delivery Hero, SponsorPay, Madvertise, HitFox and Mister Spex among current and previous portfolio companies, and is a shareholder in Vertical Media (VentureVillage and Gründerszene).