Research firm: Asian food delivery industry growth ahead by 10 years
By Global Business
The online food delivery business in Asia has mushroomed in recent years with a growth that has accelerated by as much as 10 years due to the COVID-19 pandemic, according to a market research firm.
And the growth is likely to continue in the next few years as well, according to market research firm dataSpring CEO Tomohiro Hosono.
"I think we're seeing a very interesting trend right now," adding "since pre-pandemic levels, we were seeing a lot of new businesses emerging in this market. This has accelerated what would have taken place a decade later, has taken place in a few months' time."
However, he added that there will "probably" be short-term downtrend after lockdowns lifting.
Since the beginning of the pandemic, various lockdowns and restriction measures implemented by countries have spurred a surge in demand in food delivery services in Asia. Food delivery services are not new, but apps and smartphones are expanding the reach of delivery services.
Globally, the online food delivery market is worth more than 35 billion U.S. dollars annually and is expected to reach over 360 billion U.S. dollars by 2030, according to the ASEAN Post.
In Southeast Asia, the food delivery market is expected to grow from two billion U.S. dollars in 2018 to eight billion U.S. dollars in 2025.
The largest and most popular business model involves service providers managing ordering websites and mobile apps on behalf of restaurants, and charging fees from them. The second is recruiting and managing a pool of independent contractors as delivery couriers, and charging consumers a premium for delivery.
Another model gaining traction in Southeast Asia is delivering straight from kitchens to someone's front door, without going through a store front.
Hosono said the firm has been seeing businesses and restaurants preparing multiple channels to engage with customers, including dine in, packaged food, e-commerce, and expects further innovation.
"Companies like Uber and Grab have definitely made this (food delivery) easier, by providing the platforms, but there are also local startups packaging, frozen food, or even motorbike deliveries. Who knows what will happen in the next few weeks, the new delivery trends," he said.
He added that Asian countries like China, Korea, Thailand, that already had similar takeout options even before the internet era took less time to transition, compared to counterparts in Europe or the U.S.
He said that other trends included a wider range of cash or e-wallet options, and quicker changes in e-commerce trends.
However, dataSpring also noted in a report that the pandemic is likely to hamper the global food delivery market's growth, slowing it down to 3.6 percent this year to reach a market size of 111 billion U.S. dollars before regaining pace at 11.5 percent annually.
It is expected to reach a global worth of 154 billion U.S. dollars by 2023. The research firm also said Asia-Pacific was the largest market for food delivery in 2019.