Shares of food delivery company and recent IPO DoorDash (NYSE:DASH) are trading higher on Monday as investors react positively to last Friday's news about the company's intention to start operating its food delivery service in Japan. According to Nikkei Asia and other sources, DoorDash is advertising for a general manager qualified to run operations for it in Japan, a country with plenty of opportunity for delivery service expansion.
Nikkei also reports only 5% of Japanese restaurants have any arrangements to provide home delivery of the food they make. At the same time, COVID-19 cases are soaring in Japan, with the nation's daily new cases climbing above 7,000 for the first time on Jan. 7, according to UPI. With Tokyo and the nearby prefectures hit hardest, the government has declared a one-month state of emergency in the region, Reuters reports.
Restaurants and bars, targeted as main routes of COVID-19 transmission, are therefore subject to strong restrictions. DoorDash's simultaneous market entry attempt is no accident, with a representative informing Nikkei the company "continually assess[es] expansion opportunities" while seeking new service areas.
DoorDash's managerial job posting notes the candidate "will lead DoorDash's business in Japan, and will be responsible for our overall success in the market." This expansion won't occur in a vacuum, however. While massive untapped potential remains, German delivery company Delivery Hero SE, Chinese enterprise Didi Chuxing, and Uber Technologies' Uber Eats are already operating in Japan.
While DoorDash started out with a share price some argue is unrealistically high, and has seen stock market movements caused by little more than volatility and uncertainty, today's rise appears directly linked to the possibilities offered by its well-timed attempted entry into the Japanese market.