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GrabFood heats up food delivery market

Released at: 11:15, 23/01/2019 BUSINESS SPOTLIGHT

GrabFood heats up food delivery market

Photo: Grab

Speed and technology have become potent ingredients in Vietnam's sizzling food delivery market.

by Hung Cao

Vietnam’s food delivery market has been boosted by e-commerce and become fiercely competitive and efficient, with delivery times shortened from one day to two hours then 60 minutes.

A report from Havas Riverorchid revealed that 63 per cent of consumers choose “convenience” and “quick” as reasons for using delivery services.

The latest report from the GCOMM market research company, which covered 600 people in Hanoi and Ho Chi Minh City, found that 96 per cent of respondents said delivery speed was the most important factor in making a choice about food delivery services.

The survey also rated GrabFood as the No. 1 food delivery service in terms of speed, with about 80 per cent of customers agreeing that GrabFood is the fastest food delivery service in Vietnam.

This result surprised everyone, because GrabFood is classified as a newcomer compared with other food delivery services in the market such as Now.vn and Vietnammm. To take the lead in the speed race with an average of 20 minutes, Grab relied on its own certain advantages.

“Firstly, GrabFood gets a huge amount of data from its parent company, with a wide network of merchant-partners (up ten-fold since June), and a large number of driver-partners in the market,” said Mr. Jerry Lim, Country Head of Grab in Vietnam.

In addition, GrabFood also benefits from Grab’s technology ecosystem. Users can book GrabCar or GrabBike to go to work, send goods by GrabExpress, order food via GrabFood, and make payments with GrabPay by Moca. Moreover, Grab also introduced its GrabReward feature to reward loyal customers with preferential and rewarding policies.

GrabFood’s delivery speed is also determined by GrabBike’s large driver-partner volume, meaning that GrabFood has a massive number of delivery partners in advance.

“The wide and dense network of driver-partners gives us special advantages,” Mr. Lim said. “GrabFood’s next goal is to strengthen the merchant-partner system so that customers can find the nearest restaurants, further shortening the delivery time.”

Fierce battle in food delivery speed

A Euromonitor report found that the food delivery market in Vietnam was worth about $33 million in 2018 and is expected to top $38 million by 2020. The GCOMM report also showed that 99 per cent of survey respondents use the service at least two or three times per month, with 39 per cent using it two or three times a week.

Aware of the huge potential from the market and what matters to customers, food delivery brands have tried to better the customer experience by focusing on speed. Now.vn committed to deliver food in 25 minutes, and Lala said they take 30 minutes. As a “rookie” in the market, GoFood also put the criteria of speed in its slogan “Any dish is available, and delivered fast”.

It’s a tough business, however. Major names like FoodPanda have withdrawn from the market. Among the most popular apps (Lixi, GrabFood, Foody/Now.vn, GoFood, Lala and Vietnammm), Lixi and Lala have reported slow business.

The food delivery market is expected to continue to generate fierce “money burning” competition among different providers, as happened with the ride-hailing market earlier. However, unlike the ride-hailing battle, introducing attractive promotional programs will not decide who is the winner in the food delivery market, as speed and quality are the most important factors.

In the broader context, experts believe that the beneficiaries will eventually be Vietnamese consumers when, in the future, they will have a wide variety of super apps serving all their needs with just one tap.

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