Buried within Delivery Hero's Q1 2024 earnings transcript lies a potential revolution in the making: the quiet but explosive growth of their Dmart grocery delivery service. While analysts focus on the company's Korean market share battle and overall profitability, this integrated vertical might be the real story, holding the potential to not only transform Delivery Hero's future, but disrupt the entire global grocery delivery landscape.

Delivery Hero has been remarkably tight-lipped about Dmart's exact performance, revealing tantalizing glimpses of its potential without divulging hard numbers. What we *do* know is impressive. They anticipate a positive adjusted EBITDA for Dmart by the end of 2024, just two years after acquiring Glovo , a key contributor to their integrated verticals strategy. This rapid shift towards profitability is fueled by aggressive optimization, including shutting down 200 unprofitable Dmarts in the last year, leaving a leaner, meaner network of 895 stores.

But the real story lies not in cost-cutting, but in the remarkable *growth* Dmart is achieving. Delivery Hero projects at least a 40% GMV increase for Glovo from 2022 to 2024 , a significant portion likely driven by Dmart's expansion. Consider this: their integrated verticals segment, heavily reliant on Dmart, saw a staggering 25% GMV growth and 27% revenue growth this quarter. These are not incremental improvements – they point to a business model gaining serious traction.

One key indicator of Dmart's success is its impact on Delivery Hero's *overall* revenue growth. Total segment revenues surged 21% year-on-year this quarter, significantly outpacing GMV growth. This points to Dmart's superior monetization capabilities compared to traditional food delivery. Delivery Hero attributes this to 'multiple levers,' including higher commissions, subscription fees, and – crucially – increased ad tech revenues .

Now, consider a fascinating case study hidden within the transcript. Delivery Hero showcased their 'best performing Dmart country,' revealing a country with consistent growth and sky-high profitability . While they remain coy about the location, they highlight its key characteristics: high order density, a vast SKU selection (10,000 items!), and optimized procurement and distribution. Importantly, this market *still* hasn't reached its full potential, with ad revenue from FMCG companies representing a significant untapped opportunity.

This 'North Star' market provides a blueprint for Dmart's global ambitions. Delivery Hero acknowledges that success hinges on achieving scale – high order volume, dense customer base, and robust procurement networks. Their aggressive optimization strategy, ruthlessly closing unprofitable stores, ensures they focus on markets where these criteria can be met.

So, here's the hypothesis: Delivery Hero is strategically leveraging its food delivery expertise and global network to build a Dmart empire, one profitable market at a time. They're quietly optimizing their model, mastering the intricacies of grocery delivery, and building a formidable operational advantage.

Projected Adjusted EBITDA Growth for Delivery Hero (Millions of EUR)

Based on the Q1 2024 earnings transcript , Delivery Hero projects significant Adjusted EBITDA growth across its various business segments.

Could this be the sleeping giant that awakens to dominate global grocery delivery? The evidence suggests it's a very real possibility. While Wall Street remains fixated on short-term competitive skirmishes, Delivery Hero may be laying the groundwork for a much bigger, and ultimately more profitable, future.

"Fun Fact: Delivery Hero operates in over 70 countries across the world, making it one of the most geographically diverse food delivery companies. It's no surprise that they're leveraging this global reach to strategically expand their Dmart service."