Home Delivery Heats Up APAC Hospitality Industry

Online ordering and mobile apps have restaurant kitchens sizzling all over the Asia-Pacific region.

Home Delivery Heats Up APAC Hospitality Industry

by Nikki Majewski

Posted on 08-23-2017

This article is part of our August series on travel and hospitality. Click here for more.

Online ordering and mobile apps have restaurant kitchens sizzling all over the Asia-Pacific region. Those who swipe for stir fries and click for curries are part of an exciting phenomenon where food delivery platforms offer a myriad of choices, greater accessibility, and the technological support for tailored customer experiences.

Home delivery is becoming an increasingly influential sector of the market. While seated diners are limited by the number of tables available, restauranteurs can sell meals to many more dinner plates while their menus are exposed to larger digital communities.

Food delivery in APAC is expected to grow at a 14% compound annual growth rate to 2020, according to independent research firm Euromonitor International, whose May 2016 report, “Food Delivery Race Heats Up in Asia Pacific, Part 1: Cross-Market Comparison,” said APAC is “by far the fastest-growing region globally.

Within the region, food delivery services have become most popular in China. There, the market grew at a stunning rate of 55% to more than US$20 billion in 2015, according to Euromonitor, whose report remains the most recent and comprehensive research into food delivery services in the region.

China’s rapid growth is due mainly to the success of domestic players, such Meituan Waimai and Ele.me, the latter of which plays off the popular slang for hungry and angry by posing the question “Hangry?” in Chinese. El.me delivers food from more than 300,000 restaurants across 260 cities.

“Other app-based delivery services competing for share include Chinese search engine giant Baidu’s takeout service, Baidu Waimai, as well as smaller players Dianping.com and Taodiandian, all of which operate on a much smaller scale,” the report said.

Innovate, Grow, Repeat

While China might seem impenetrable, other parts of the region offer opportunities for international food-delivery players with expansion plans.

Foodpanda, for example, a Berlin-based food delivery offering, has been actively growing throughout the region. In Q1, it announced a 222% growth in Asia, with plans to double order volumes by the end of the year, according to Singapore managing director Luc Andreani.

“Customers are becoming extremely demanding, but rightly so. In Singapore, whoever is going to win this market is whoever serves the customer the best and has the best inventory, which means the spectrum and offering of restaurants,” Andreani told online site NewPaper.

Considering the smaller scale of markets such as Singapore, food delivery services will have to innovate logistically to stand out.

“Foodpanda is testing drone delivery in Singapore to cut down on overall delivery times, hoping that will translate into higher transaction volumes,” the Euromonitor report stated.

But as important as logistics are to customer experience, so, too, is connectivity.

“Connectivity is not necessarily as strong as it is in the U.S., and we’ve had to adapt our app,” said Simon Rossi, general manager of UberEATS, APAC, which in May launched its food delivery service in India in May. Operations kicked off in Mumbai and has since expanded to other major cities including Bengaluru, Hyderabad, Pune, Chennai, and Gurugram. (More about that in Adobe Experience Makers podcast here.)____

Optimising the UberEATS app to a market with varied 3G and WiFi capability is essential if the business is to play its part in connecting customers to restaurants and ultimately deliver the goods within the promised timeframe, Rossi added.

“Having a really good connection between the consumer app, the restaurant app, and the courier or delivery partner is vital,” he said. “If you say that you’re going to deliver a hot curry in 30 minutes, it’s really important for it to turn up in 30 minutes.”

‘Stealing’ Success

Companies will need to innovate if they want to gain market share, particularly in the region’s smaller, more saturated markets such as Singapore and Hong Kong, the Euromonitor report stated.

“Home delivery in the less developed markets of Vietnam, Indonesia, and the Philippines is forecast to grow rapidly, but local market conditions will make it difficult for global food delivery players to gain ground in the near term.”

This means players such as UberEATS will need to continually looking for new ways to stand out from the crowd.

“To stay ahead, companies can’t stop innovating,” Rossi said. “I truly believe it’s very much about giving staff and employees the opportunity to experiment, to create, to test different ideas.”

As Rossi sees it, a willingness to experiment is essential to finding ways to optimise the service and ensure that, in terms of customer experience, they can deliver as promised.

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