As countries in Southeast Asia ease off their social movement restrictions, food delivery platforms are pivoting to remain relevant. Foodpanda, for instance, recently launched a new function to help restaurants drive awareness and increase footfall for in-person dining. The move comes as Foodpanda increases its focus on profitability, according to the company’s senior commercial director for Apac, Toshit Bharara. “We’ve had good organic growth over the past few years, but now it’s
t’s all about profitability. We launched PandaPro back in 2021, which is our subscription programme for exclusive deals and benefits on food and groceries, so that’s been a big hit,” he told Inside Retail.
According to Bharara, Foodpanda now has about a million paid subscribers, and the offering has been well-received by customers, with the frequency of orders going up.
While there may have been a slight drop-off in terms of organic growth of customers on the platform over the last year or so, the one interesting trend that Bharara has noticed is that food delivery has become a way of life for customers in the region.
At the same time, subscription services have helped the company bridge the gap between a decrease in deliveries and an increase in dine-in customers. According to Bharara, the company has made sure customers get discounts with minimal terms and conditions.
“Our overall objective is to keep customers getting discounts for dine-ins with a focus on quality rather than quantity. For instance in Singapore, we focus only on top restaurants so that the customer experience is maintained at a good level,” he added.
Foodpanda spends time training restaurant staff to be aware of what the PandaPro subscription entails. This has the benefit of ensuring the overall customer experience is satisfactory. So far, this approach has worked well in markets like Singapore and Malaysia.
Key trends
Food delivery now accounts for almost 15 per cent of restaurant sales in the Apac region, according to Bharara. In Singapore especially, delivery and self pick-up are very popular methods of ordering.
“There is also a very clear road towards digitisation that is occurring in this region. From ordering food by scanning QR codes, to cloud-based solutions for the back-end, restaurants have really embraced a digital first approach to their business,” he said.
With all the worries surrounding inflationary pressures and rising costs, Bharara explained that Foodpanda’s business operations have largely been insulated, as food and grocery delivery has become the norm.
“We have not seen any effect on our business from all these macroeconomic factors. Our services are now almost essential for our customers, and now with our subscription models, there are incentives for customers to keep using our services,” he noted.
The Apac market
In February, Measurable.ai released its inaugural Asia Online Food and Grocery Delivery Overview Report, which captured key insights across nine markets in Asia from 2019 to 2022.
In Singapore, demand for food delivery grew at 47.1 per cent CAGR from 2019 to 2022. An average Singaporean was spending almost S$30 as of Q4 2022. While in Malaysia, there was a 81 per cent CAGR from 2019 to 2022, with an average spend of 30 Malaysian ringgit per order.
Thailand experienced 95 per cent CAGR for food delivery from 2019 to 2022, with an average of 150 Thai Baht spent on orders in Q4 2022. While, in the Philippines, the market experienced a 116 per cent CAGR from 2019 to 2022, with average orders around 500 Philippine pesos.
Hong Kong also experienced a huge uptick in food delivery demand at 74 per cent CAGR from 2019 to 2022. Taiwan experienced 66 per cent CAGR from 2019 to 2022. Surprisingly, for India, it only registered 18 per cent CAGR from 2019 to 2022.
Japan’s food delivery market has been growing steadily, at around 60 per cent CAGR, from 2019 to 2022. Average order values for food delivery hovered around the 2000 Japanese yen mark.
A bird’s eye view
In terms of market share, GrabFood rules the roost in Singapore with 50 per cent, followed by Foodpanda and Deliveroo. While in Malaysia, Foodpanda has 55 per cent, followed by GrabFood at 45 per cent.
In Thailand, GrabFood has 60 per cent market share and is the leader. In the Philippines, it’s Foodpanda at 60 per cent, and in Indonesia, it’s neck and neck between GrabFood and GoFood.
Hong Kong’s leader is Foodpanda at around 70 per cent, followed by Deliveroo at around 30 per cent. Foodpanda also leads in Taiwan at around 55 per cent. While in India, Swiggy leads the way, followed by Zomato and UberEats.
In Japan, UberEats has been leading the way since 2020. Foodpanda, Rakuten Delivery and Didi have quit the market. So the only other players left are Demaecan, Wolt, Doordash and Foodpanda.