On-demand food delivery next growth area in SEA region

On-demand food delivery services are the next growth frontier in Southeast Asia. Frost & Sullivan's (F&S) recent analysis revealed that the industry presents promising growth opportunities for market participants. Data showed that increasing internet penetration and mobile applications and surging internet subscribers accelerate market expansion. Furthermore, the firm said the gross merchandise value (GMV) of the market in the region is likely to reach US$49.72 billion by 2030, up from $15.15 billion in 2021, registering a compound annual growth rate (CAGR) at 14.1%.
Ming Lih Chan, industry analyst, Mobility at Frost & Sullivan, said:
"Backed by large customer bases and user dependence, operators' super apps are enabling value chain integration. Additionally, major on-demand service operators will broaden their product portfolios in the next one to three years, including on-demand deliveries of food and beverage, fresh foods and kitchen supplies, groceries, pharmaceutical products, and so on."
F&S said to tap into the growth prospects, on-demand food delivery operators should consider the following:
• Evaluate the potential integration of different industries, especially those related to mobility, including strategic partnerships, mergers, and acquisitions.
• Improve the instant food delivery market and strengthen their competitiveness by broadening their product portfolios and applying new technologies.
• Explore partnerships with merchants, especially food and beverage restaurants and catering services, to enrich product choices for users.
Chan explained: "The developments of on-demand food delivery services will lead to the optimisation of merchants, including supply chain management and time management, which vary according to the food delivery types such as instant, scheduled, and deferred. The rapid advancement of technology and the popularisation of mobile internet, adoption of digital payment solutions as opposed to cash on delivery will also increase." (Image from Unsplash)

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