Once upon a time, a late-night craving means either having to change out of your PJs to go get it yourself or going to bed hungry.
Now, not only can you get your desired meal delivered right to your doorstep, you have a plethora of options—from fast food and hawker fare to Michelin-starred dishes and trendy bubble tea—to choose from.
The food delivery market here has truly exploded in recent years, starting in 2012 when foodpanda came into the picture. Then, the only players offering regular, on-demand food delivery services were fast-food chains and a smattering of privately operated ones by a handful of restaurants.
Deliveroo joined the fray in 2015, along with honestbee, which has since shut its food delivery operations in Singapore. UberEats was rolled out the next year, only to cease operations when ride-hailing company Grab took over Uber’s operations in Southeast Asia in March 2018—this resulted in GrabFood.
It’s easy to see why players want a piece of the online food delivery pie. Revenue in this sector in Singapore, growing at an annual rate of 17.9 per cent, is expected to swell to US$316 million by 2022, according to market research firm Statista.
Naturally, the face of F&B has changed, along with the habits of diners. While diners want their food faster and at the same dine-in quality, they also expect to pay an affordable price for it. Not only do delivery providers have to keep up, restaurants and stalls are forced to adapt to the new demands as well.
“In a consumer study conducted in 2018, we found that seven in 10 (69%) consumers in Singapore order from food delivery apps at least once a month.”
– Siddharth Shanker, General Manager, Deliveroo Singapore
Konstantino Blokbergen, the founder of bakehouse and restaurant Firebake, sees the delivery platforms as avenues that have helped his business grow closer to existing and potential diners. “By using these delivery apps, we are able to increase our visibility, and we’ve also benefitted from some incremental sales at the beginning, since more focus are usually given (by the platforms) to new restaurants at the start of marketing,” he shares. Firebake is currently on two delivery platforms—GrabFood and Deliveroo.
While accepting that delivery services are becoming increasingly necessary to both diners and businesses, Blokbergen acknowledges that it’s a double-edged sword for restaurants. “Our dine-in business may have been affected as consumers now have more motivation to stay home to eat. Many options are available to them as more and more merchants and restaurants participate,” he says. “But at the same time, we can continue serving diners at times when it may be inconvenient to head out, such as during the recent haze episode.”
Singapore Polytechnic marketing lecturer Jonathan Lok agrees, “By removing the limitation of dining at physical outlets, the dining scene is actually able to cater to as many diners as they can prepare meals for.”
And while diners may discover new restaurants and offerings on an app, their first impressions will be made from the app as well, he points out. “Diners will be getting their first impressions based on the reviews they see within the app. They are empowered with more information even before clicking into the store,” Lok explains.
One way to balance the pros and cons of the delivery and dine-in concepts is introducing some form of differentiation. A case in point is Deliveroo’s ‘virtual brands’, says Siddharth Shanker, general manager of Deliveroo Singapore. “These are restaurants that exist on Deliveroo only with a new identity and menu offering. Virtual brands allow restaurants to reach potential customers who might never have heard of them before with new or more accessible concepts and are also an excellent way for restaurants to streamline and market test menus,” Shanker says.
He cited family-run Greek restaurant Blu Kouzina as an example. “Its virtual brand VIOS, a fast casual bowl concept, has seen 820 per cent in revenue growth since its launch at Deliveroo Editions (a centralised kitchen that hosts several restaurants) in August 2017.”
Now, convenience, a crucial attraction of food delivery services, isn’t without its challenges. One of the main ones: how to make the industry greener?
Food delivery companies have had to work hard to make what is essentially a disposable dining culture more environmentally sustainable. Foodpanda was a pioneer in this regard. “It is no secret that the industry generates significant plastic waste and this is a challenge that we’ve decided to tackle head-on. In January 2018, we introduced an opt-in plastic cutlery option on our platform, and to-date, we’ve saved more than 1.5 million sets of single-use plastic cutlery,” says Luc Andreani, managing director, foodpanda Singapore. “Following the success of our initiative, major players in the industry have also followed in our footsteps. This is only the beginning. We have also launched climate positive initiatives and are exploring how to reduce food waste and cost-efficient biodegradable packing options.”
Deliveroo too made plastic cutlery an opt-in from 2018. “Some 91 per cent of meals are now delivered without disposable cutlery. Recently, we partnered exclusively with BioPak to offer sustainable packaging options to all our restaurants, so we can help our restaurant partners make the easy switch to eco-friendly packaging and enable our customers to enjoy their meals in a sustainable way,” says Shanker.
Grab will introduce the cutlery opt-in toggle in November 2019.
Even better and faster
Cloud kitchens look to be the next big frontier in the food delivery scene. Disrupting the production cycle, the aim of remote and centralised cloud kitchens is to offer cost savings and logistical efficiency, which in theory can be passed on to consumers.
Several cloud kitchens have opened in Singapore in the last year alone. These include three by Deliveroo and two by foodpanda. While Grab does not yet have such a kitchen in Singapore—there are rumours that it may set one up locally by this year—it already has 18 such facilities in Indonesia and one in Bangkok, Thailand.
Besides this, using data and AI to enhance customer experience is also key to success—and every little thing counts. For instance, Grab recently introduced the innovative Bubble Tea Club, Singapore’s first bubble tea subscription plan which launched on 18 October “It was created to quench Singaporeans thirst for boba, while helping them to save more,” says Dilip Roussenaly, head of GrabFood Singapore.
Additionally, to address the time challenges of Singaporeans who are “constantly on the go, rushing from place to place”, users of the Grab platform can not only book a ride, but also have up to four different GrabFood orders going concurrently. This integrated nature of Grab’s many services grants users convenience, efficiency and the ability to take advantage of a full rewards ecosystem, lecturer Lok points out. “This shows that they put consumers’ needs first. We are at the age where the consumer dictates market share,” he explains.
And that, is the crux of the game, whether it’s food delivery or dine-in: adapting quickly to answer the needs of the customer.
This article was first published in Wine & Dine November/December 2019: Hindsight 2020 issue.