In today’s fast-paced world, the expectation of on-demand services has become the norm, contributing to an evolving landscape of grocery delivery.
To meet these growing expectations, grocers across APAC look to creativity and innovation to enhance efficiency, speed, and variety in their offerings.
Retail in Asia speaks with Raphael Zennou, vice president for quick commerce at Foodpanda, on what it takes to become a go-to platform for groceries in 2024.
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RiA: Tell us about the thinking behind product categories on Foodpanda’s cloud grocery store, Pandamart, and shops. Do all categories work well for quick deliveries?
Raphael Zennou: When we first launched our cloud grocery store Pandamart and retail marketplace Foodpanda Shops, the product categories available were mostly catered for impulse purchases such as snacks and drinks, given our observation of customer demands then.
Through the years, we see that customers are shopping online for all needs big and small, want more choice and convenience, and demand quicker access to the items they need. Now, both shops have an expansive range of products that can rival traditional grocery stores, including fresh produce such as fruits and vegetables, as well as meat and seafood. Customers can meet their varied grocery needs by shopping from pandamart, as well as a diverse range of retailers from foodpanda shops, and receive their orders within the hour.
To expand our quick commerce (q-commerce) services across the region, we need to have quality offerings for our consumers which includes having a wide breadth and depth of products. The products offered are meant to be complementary to suit different needs, from round-the-clock, ultra fast convenience for intention-based purchases and urgent needs, to a wider range of product categories to cater for more occasion-based shopping and regular pantry top-ups.
[For example] Pandamarts are well-stocked with a healthy variety of core grocery essentials that can be delivered ultra fast, while Foodpanda Shops provide a more comprehensive shopping experience and boast a larger variety of categories that spans health and beauty, electronics, and even toys and games.
We do find that typically, all categories work well for quick deliveries given consumers’ desire for instant gratification. Of course, that said, not all categories would require ultra fast deliveries of within the hour, and consumers are also given the option of timing their deliveries to better suit their schedules.
The selection of product categories is also largely guided by customer feedback and demands. For example, from our data, we see increasing demand for quick deliveries of fresh produce such as fruits and vegetables, as well as meat and seafood, which drove the decision to make those available. To provide an even wider selection of fresh produce, we also partner large grocery chains from across the region, such as DFI Retail Group in Singapore, Robinsons Easymart in the Philippines as well as Giant Mini in Malaysia, so consumers will be able to find what they need on a single platform.
RiA: How do you see the e-commerce landscape in 2024?
Zennou: Consumers here in Asia are generally big fans of convenience. In the past years, we’ve seen that the demand for fast deliveries, or q-commerce, serve beyond impulse purchases or urgent needs, and have become an increasingly useful service for regular grocery top-ups, and even for those who are casually shopping.
This year, while customers will still appreciate fast deliveries of orders, they do not need their orders to be delivered ultra-fast. We find that the demand does not change drastically for orders that are delivered in 15 minutes vs those that are delivered in 45 minutes, suggesting that hyperfast delivery times do not heavily influence the purchasing decision.
With customer expectations continuing to evolve, retailers will need to tailor their offerings accordingly to keep up. Retailers that provide flexible delivery options – including the availability of quick deliveries – will have an edge over those that do not.
RiA: Tell us about Foodpanda’s strategy to balance asset-light and asset-heavy portfolios in delivery.
Zennou: The competition for Asia’s online grocery delivery sector is intensifying. Achieving the right balance between an asset-heavy and light approach, as well as having a viable path to profitability are key to survive and succeed in this competitive market.
The strategy to balance between asset-light and asset-heavy portfolios is shaped by our understanding of consumers’ wants and needs, and how each service addresses different demands. Owning our own inventory allows us to be extremely nimble when it comes to procuring specific products demanded by each locale, such as the availability of premium meats and vegetables in certain areas, for instance.
Having our own warehouses also means we have full control over operating hours, allowing us to fulfil deliveries 24 hours a day. This is complemented with our asset-light offerings, through our partnerships with retail partners.
RiA: How do you use technology to solve expectations from customers, merchants, and delivery partners – and build a sustainable retail ecosystem?
Zennou: Technology and data intelligence allows us to better the experience for our customers, merchants, and delivery partners, while improving the efficiency of internal processes. Tech and data insights enable us to determine the products to procure based on past and anticipated demand, and provide guidance on how inventory is arranged for maximum picking efficiency. By doing so, groceries and household essentials can be efficiently packed and delivered on-demand to consumers quickly.
Merchant partners on Foodpanda can leverage our data and logistics infrastructure to offer quick deliveries, without any hefty investments. Our platform insights also enable merchant partners to easily access data and resources such as analytics of their sales, giving them deeper insights which can be used to guide marketing strategies.
With tech, we’re also able to launch new features that provide merchant partners with more ways to connect and engage with consumers – such as our ads solutions. By providing our merchant partners with access to digital tools and resources required to support their business, we are helping to empower them to future proof their business – regardless of how the marketplace continues to evolve.
As consumers’ attention spans are getting increasingly shorter, we are also constantly innovating to personalise the shopper journey, so consumers are served their preferences without taking too long to search for what they need. For example, different consumers are provided with personalised discount codes based on their viewing and purchasing behaviour on the app.