According to American research and consulting firm Frost & Sullivan’s recent analysis, ‘Southeast Asian on-demand food delivery market’, the industry presents growth opportunities for market participants. Increasing internet penetration and mobile applications as well as surging internet subscribers accelerate market expansion. The gross merchandise value (GMV) of the market in the region is likely to reach US$49.72 billion by 2030, up from US$15.15 billion in 2021, registering a compound annual growth rate (CAGR) at 14.1 percent.
Southeast Asia’s on-demand food delivery market is highly concentrated. GrabFood (by Grab), Foodpanda (by Delivery Hero), and GoFood (by Gojek) contributed 84.8 percent of the total market share in 2021, followed by smaller operators such as Deliveroo in Singapore, Line Man in Thailand and ShopeeFood in Indonesia, Malaysia and Thailand. By market share in 2021, GrabFood is the leading on-demand food delivery service in Southeast Asia with 47.8 percent of the market, followed by Foodpanda at 23.2 percent, GoFood at 13.8 percent and others at 15.2 percent.
“The rise of shared mobility solutions in Southeast Asia has accelerated the expansion of on-demand food delivery services. Backed by large customer bases and user dependence, operators’ super apps are enabling value chain integration,” said Ming Lih Chan, Industry Analyst, Mobility at Frost & Sullivan. “Additionally, major on-demand service operators are expected to broaden their product portfolios in the next one to three years, including on-demand deliveries of food and beverage, fresh foods and kitchen supplies, groceries, pharmaceutical products, and so on.”
“The developments of on-demand food delivery services will lead to the optimization of merchants, including supply chain management and time management, which vary according to the food delivery types such as instant, scheduled, and deferred. In addition, with the rapid advancement of technology and the popularisation of mobile internet, adoption of digital payment solutions as opposed to cash on delivery will also increase,” added Chan.
To tap into the growth prospects, on-demand food delivery operators should evaluate the potential integration of different industries, especially those related to mobility, including strategic partnerships, mergers, and acquisitions. They should also improve the instant food delivery market and strengthen their competitiveness by broadening their product portfolios and application of new technologies as well as explore partnerships with merchants, especially food and beverage restaurants and catering services, to enrich product choices for users.