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Setting new rules for the food delivery industry in a post-pandemic world

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COVID-19 seemingly reshaped the food delivery world, that the number of users has rapidly grown, due to the high convenience and diversity. Besides, the high competition among sectors has forced businesses to changes their services.

Before the coronavirus pandemic, China referred to the largest market for on-demand food delivery in the world, with a value of approximately US$85.4 billion in 2019, while the global market is predicted to reach US$365 billion in 2030.

The outbreak of coronavirus could be the detonator of the booming online food delivery in Asia since the surge of demand in using food delivery services has been capture in many countries. Malaysia has seen the increasing at 30 per cent of the online food ordering, while roundly 25 per cent Vietnamese customer raised their online shopping activities.

In Vietnam, local delivery apps have reported emerging the growth rate of 80 per cent in the order volume since April 2020. According to Kasikorn, the value of the Thailand food delivery market will rapidly increase by around 11 per cent to 15 per cent annually.

However, the entering of new entrances is heating the competition among the industry. Additionally, customers have changed their behaviour due to uncertainty in this period, which leads to startups have to find a way to adopt rapid change.

Here are some examples of how food delivery startups gain success due to the responsiveness of the market changes.

Deliver the cooking experience, not dishes

In the early of 2020, food deliveries tend to the intermediaries between restaurants and customers, shipping complete and well-prepared dishes to users’ home. However, that model rapidly considers being inappropriate since customers doubt about the risk of contagion during the cooking process.

Besides, cooking experiences seemingly catch customers’ attention, who enjoy cooking but do not want to prepare materials. As a result, services of delivery receipt box help several startups succeed.

Ele.me and Meituan are two leading food delivery platform in China currently launched ingredients or full recipes delivery widely to Chinese citizens. In which, customers could order and get a shipping box from raw materials, marinated foods to seasoned items.

According to QuestMobile, it has roundly 70 million active users monthly. Therein, there will be expectedly 60 per cent of them becoming regular users with at least two orders per week.

In fact, food receipt delivery has saved the majority of restaurants in Southeast Asia from the risk of bankruptcy. Many food shops in Beijing reported a dramatic drop of 90 per cent in revenue from February to March 2020.

Being aware of food shipping power, restaurant owners have joined Meituan networks and rapidly raise their orders. At the peak, Meituan added 7,600 restaurants into its partners in one month.

Focus on middle-aged customers

Before 2020, the target customers of many food delivery are seemingly young generations and professionals. Roundly 63 per cent of users in online food booking platforms were under 30 years old.

However, the data was changed that the numbers of middle-aged customers have remarkedly increase in the first half of 2020. In China, food delivery platforms witnessed an average raising of 35 per cent in new users between the age of 40 to 50. Remarkably, the number of users over 40 of a food delivery startup in Beijing grown at approximately 240 per cent in February 2020.

While young people focus on convenience, people over 35 years old consider more about the nutrient. In this case, several food delivery services introduce the healthy meal set to pursue those customer groups. In order to make things easier for those customers, delivery services also allow ordering right on message apps.

Particularly, middle-aged Vietnamese can handily place an order in Zalo, which is a local communication app. Similarly, Chinese people can order food delivery via WeChat. Then a shipper will handle the remaining works.

Contactless collection points

Obviously, traditional food delivery also has the risk of COVID-19 infection since shippers and customers have close contact.

In this case, a solution of contactless collection points allows users to get their orders in a particular location without direct communication with shippers.

Alibaba led the trend that it has launched the contactless delivery service across its platforms, including Ele.me, Freshippo, and Tmall Mart since January, which currently become popular in some cities. Meituan has made it stand out as it set up a series of smart cupboards in selected buildings and hospitals with UV sterilisation deterring the infections. Shippers would put the box inside that customers can unlock the cupboard via a QA code, provided by the apps.

The food delivery app by Asia unicorn, Grab Food also offers contactless delivery in Vietnam, Thailand, Indonesia, and the Philippines. By which, customers define the specific collection point where shippers can put the box on it.

Additionally, Gab also encourages online payment that shippers can leave right after placing packages in the indicated location.

Not only in the midst of the pandemic but in post COVID19, this type of delivery might also be the new rule to companies in the market.

In which, customers can collect their orders whenever they want, while shippers reduce the waste time of waiting for recipients. Many shippers claimed that they could save 10-20 per cent shipping times leveraging contactless collection points.

In conclusion, as the potential of the food delivery market reveals, startups have faced fierce competition in the industry. Keep an eye on every minor change in the market to adjust business strategies will lead to big success.

This article was first published on e27, on Jun. 16, 2020.