When you don’t feel like slaving away in the kitchen, there is a quick way to get a meal on your table in no time at all – order it online! A few clicks and your gourmet meal will be making its way to your door while you sit and relax in the comfort of your own home. It’s no great surprise that food delivery services are booming nowadays across the globe. What was already becoming popular, exploded during the 2020 pandemic lockdown. From carnivores and vegans to flexitarians and celiacs, everybody is getting on board with this trend. Let's look in detail at this revolution that is taking over the dining scene in Thailand and beyond.
High growth potential
Even before the emergence of COVID-19, food delivery in Asia was already seeing 15% year-on-year growth across the region. All the pandemic did was further broaden the spectrum of businesses offering this service. The shutdown of in-person dining forced restaurants and cafés to turn to offering off-premises dining as a source of revenue. Despite the fact that delivery had been on the rise for several years prior to the pandemic, many restaurants were not prepared to make the change and had to pivot quickly to ramp up and offer a delivery service to keep their customers (and save their bottom line!). The same was true on the other side of the equation. Many consumers had never used a food delivery service prior to the global shutdown but quickly jumped at the chance when their dining freedom was taken away. Diners across the world responded enthusiastically to getting fast, fresh and varied food delivered directly to their door. In a short amount of time people who were previously not comfortable with, or used to ordering food for delivery, made the switch. Even as restrictions on in-restaurant dining have begun to ease across Thailand and beyond, the effect of several months of change seems to have had a long-lasting impact. Many experts agree that this amplification in delivery demand is not going to abate anytime soon. According to Technomic’s May 2020 report, Menu Monitoring the COVID-19 Pandemic, 46% of consumers said they would continue to order food and beverages for delivery from restaurants. And a further 37% said they were always on the look out for delivery-friendly meals that travel well from restaurant to home.
As food delivery demand has soared, so too has the number of local and international players entering the mix. In Thailand alone, there are already several dominant players, namely Foodpanda, Grab and Lineman. Of course, not every player who enters the fray is successful, with many smaller operations having already fallen by the wayside. The keys to success are: fast delivery time and wide coverage area, a vast restaurant choice, low delivery costs, accepting a variety of payment methods and offering a good user experience. Like any third-party business, there are external challenges that vendors face which are outside of their control, namely: technology acceptance and adoption rates among users, food standards from restaurants, and aggressive pricing due to competition in the market. Internal challenges consist of high marketing costs, logistics management issues, and providing an attractive business model for drivers and suppliers. Platform aggregators that can come up with the right business model — optimising their logistics, and properly incentivising retailers and drivers, while satisfying consumers — will have the golden opportunity to make big bucks. The last piece of the puzzle may well be differentiation. As all aggregators are competing against the same set of metrics, they will need to come up with sophisticated ways to keep their customers coming back time and time again. One of the main ways they are doing this is by leveraging the high rates of smartphone penetration. Mobile phones make it exceptionally easy for people to browse dining options, check reviews, look for deals and place/track an order. This level of online transparency and abundance of information leads to better quality food, affordable prices and high service standards. Factors which vendors know are most important to customers, especially repeat ones.
Fast-changing consumer behaviour
In Thailand, as in many parts of the world, food and eating have long been a big part of the culture and social life; not to mention a big part of the county’s tourism sector. Sadly, eating out with friends and families is sometimes not the joyous occasion it once was. It can be tense and complicated, underscored with health and safety concerns. As the COVID-19 pandemic shows no signs of going away anytime soon, ‘ordering-in’ shows strong signs of being here to stay. For the most part, that is why the food delivery revolution has been so successful, as it has cleverly tapped into people’s desire to continue consuming meals as a convenience, celebration or a shared experience. Indeed, ordering at home is often viewed as a ‘treat’, both a chance to escape cooking and enjoy a delicious meal from a much-loved restaurant. But in many ways, hard-working urbanites are now viewing food delivery as the new norm. It now seems that people are almost becoming too used to not cooking! The convenience of having fresh food delivered directly to their door is irresistible for many consumers. Not to mention the added benefits of avoiding traffic, long lines and sometimes surly waiting staff. And when you start to examine the options, it’s almost endless… tacos on Monday, Pad Thai on Tuesday, pizza on Wednesday, curry on Thursday and so on. And best of all, no matter your ethical or dietary restrictions there is a food delivery option to suit you; whether you’re on a plant-based diet, carb-free challenge or a high-protein plan. We’d love to hear your thoughts on our delivery service. What dishes have you tried? What dishes are you craving? And what dishes have you coming back for time and time again?