GrabFood heats up Vietnam’s food delivery market

By Phuong Nguyen   January 22, 2019 | 04:25 pm GMT+7

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

The food delivery market has been boosted by e-commerce and become fiercely competitive and efficient. Delivery times have been shortened from one day to two hours to 60 minutes.

According to a report by Havas Riverorchid, 63 percent of consumers choose "convenience" and "quick" as reasons for using delivery services.

The latest report by GCOMM market research company, which covered 600 people in Hanoi and Ho Chi Minh City, found that 96 percent of respondents said speed was the most important factor in choosing a food delivery service.

The survey also rated GrabFood as the number one food delivery service in terms of speed, with about 80 percent of respondents agreeing to the statement "GrabFood is the fastest food delivery service in Vietnam".

GrabFood had a massive number of delivery partners in advance. Photo: Grab

GrabFood had a massive number of delivery partners in advance. Photo by Grab

This was a surprising finding, given that GrabFood is a newcome in the food delivery services market, with Foody, Now.vn and Vietnammm being the early birds. To take the lead in the speed race with an average of 20 minutes for each delivery, Grab has used certain advantages.

Firstly, GrabFood gets a huge amount of data from its parent company Grab, which has a wide network of merchant-partners that has seen a ten-fold increase since June, and a large number of driver-partners in the market," a Grab representative said.

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

GrabFood's delivery speed is also determined by GrabBike's large number of driver-partners. This meant that GrabFood had a massive number of delivery partners in advance.

"The wide and dense network of driver-partners gives us special advantages. GrabFood's next goal is to strengthen the merchant-partner system so that customers can find the nearest restaurants, further shortening the delivery time," said Jerry Lim, Country Head of Grab in Vietnam.

A competitive race

A Euromonitor report said that the food delivery market in Vietnam was worth about $33 million in 2018 and is expected to top $38 million by 2020.

It predicts that this trend will gradually become a habit. The GCOMM report also showed 99 percent of survey respondents use the service at least 2 to 3 times per month; 39 percent use it 2 to 3 times a week.

Aware of the huge market potential as well as what matters most to customers, food delivery brands have tried to improve customer experience by focusing on speed.

Now.vn has committed to deliver food in 25 minutes, Lala in 30 minutes. As a rookie in the market, GoFood has put out a slogan that says: "Mon gi cung co, ma con giao nhanh" (Any dish is available, and delivered fast).

However, the business is tough. Some big names like FoodPanda have withdrawn from the market. Among the most popular apps (namely 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 "burning money" competition among different firms, as it happened with the ride-hailing market earlier.

However, unlike the ride-hailing battle, releasing as many attractive promotional programs as possible cannot decide the winner in food delivery market; speed and quality will be the most important factors instead.

In the broader context, experts believe that customers will be the eventual beneficiaries with a wide variety of superapps serving all their needs with just one tap.

 
 
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