Major food delivery services say demand will not let up as restaurant restrictions continue to be eased. But services Deliveroo and Foodpanda see room to diversify into other business areas. — SCMP
Hong Kong’s two major food delivery services have said they are optimistic the expansion of the market would continue, despite a gradual return to normality from coronavirus restrictions because Covid-19 had changed people’s dining habits.
Foodpanda said on Monday it had 60% more active customers than it did in early 2020, and rival Deliveroo added it had found that Hongkongers spent 22% more on their orders than before the pandemic struck.
App Annie, an AI-powered platform on customer information, said there were 1,244,926 Foodpanda active users and 705,348 Deliveroo active customers by October.
People have faced bans on restaurant dining after 6pm and caps on the number of people allowed at a table over the past three years under a variety of anti-epidemic measures.
The authorities scrapped opening restrictions on restaurants and increased the number of patrons allowed at each restaurant table from eight to 12 in October.
But Andrew Hui Chee-yin, the general manager of Deliveroo Hong Kong, said he was confident about growth in food delivery, as suggested by an October customer survey.
“More than 65% of the survey respondents expect that the frequency of food delivery ordering will either be maintained or increased when they look forward to the next 12 months,” Hui said.
He also highlighted 95% of restaurant signed up to the service believed that delivery would continue to play a big part in people’s lives.
“We see a lot of growth prospects in food and also grocery delivery in the coming years,” he said.
Hui added that the firm had also invested in increasing its pickup business, where customers collect the food they ordered themselves, avoiding service charges.
The Deliveroo survey, which polled 1,000 people, showed that monthly food delivery spending in Hong Kong increased by 22% from HK$1,095 (RM636) in 2019 to HK$1,334 (RM775) in 2022.
About 20% of them spent more than HK$2,000 (RM1,162) a month on food deliveries.
The poll found 36% of respondents did not want to cook and 25% did not want to dine out to avoid crowds.
Deliveroo has about 12,000 delivery workers and 10,000 restaurants on its platform and Foodpanda has about 12,000 couriers and works with 14,000 restaurants.
Ryan Lai Wai-yan, the managing director of Foodpanda Hong Kong, said he remained hopeful about the food delivery market.
“The consumption pattern shows that people enjoy the convenience and transparency of the platform,” he explained.
“The post-Covid impact won’t be that big and we are very confident that our food and grocery delivery, as well as food pickup, has become an indispensable part of people’s lives.”
Lai said food and grocery delivery would remain the mainstay of the business, but revealed the platform had new plans such as a “dine in” service, which allowed subscribers to redeem discount coupons from the app at its partner restaurants.
He added the platform had also launched services for people to place one-off orders to send documents or parcels through Foodpanda.
“We would like to utilise our online platform to bring our customers to the restaurants to benefit our partners,” Lai said.
Simon Lee Siu-po, an honorary fellow of the Asia-Pacific Institute of Business at Chinese University, agreed the platforms needed to diversify because of the risk of decreased demand for food delivery.
He added the platforms had to understand their restaurant partners, as some added their own service charges and billed for starters supplied even if they were not ordered.
“The information is crucial to tailor-made cheaper options for consumers to attract them to order pickups”, Lee explained.
Ray Chui Man-wai, the chairman of industry group the Institute of Dining Professionals, said food delivery was still essential to gain exposure for smaller caterers.
“Food delivery platforms have become the lifeline for many restaurants that were impacted by the dining restrictions,” Chui said.
Christine Ngai Mei-fan, 32, a secretary at an accountancy firm in Central, said she would still use food delivery services.
“As much as I enjoy eating at fancy restaurants, food delivery is the best solution when it comes to busy days or lunch meetings. To me, it’s not related to the pandemic at all,” she said.
But Jonathan Cheung Hing-kai, 33, a copywriter at a Quarry Bay advertising agency, said he had cut his food delivery orders last month.
“I felt so cooped up when I was working from home and eating there all the time. Now I don’t want to spend on extra delivery fees, so I go to nearby restaurants and order pickups more,” Cheung said.
Foodpanda was first to enter the Hong Kong market in May 2014.
Deliveroo set up shop in November 2015 and UberEats opened a year later, but the latter wound down its operation in the city at the end of 2021 because of slower-than-expected growth.
Foodpanda and Deliveroo are under investigation over suggestions they have breached competition laws by requiring their partner restaurants to agree to exclusive deal.
The Competition Commission told the Post the investigation continued and that it had asked restaurants for information which could help to discover potential anticompetitive behaviour. Both services said they were cooperating with the inquiry. – South China Morning Post
