Page 28 - FoodFocusThailand No.174 September 2020

SCOOP

Other Important Points Should Be
Followed
1. The continual growth of food
delivery business after COVID-19
pandemic is undefined. The rapid
increase of business expansion could
quickly reach a maturity stage. If we
look forward to the next 2-3 years, it
is expected that the numbers of food
orders will shrink compared to 2020.
Nonetheless, it still grows averagely
at 4-7 percent compared to 2019
(before the spreading of COVID-19
outbreak). The gradual growth still
moves on with the repeating orders
from the existing customers. Plus, the
price promotion from restaurants may
trigger a temporary demand from time
to time. Additionally, the recent
coming of cloud kitchen has resolved
the restaurant coverage, so that the
customers are able to order within the
zone nearby.
2. The new arrival of food delivery
business from in/outside of industries
is weakening the market. It is noted
that the current business model has Need to Know
not been yet sustainable. It could
cause some players to give up, or to Fierce Competition in Food Delivery Business
be forced a merger acquisition if the
market is reaching to a shake-out KResearch predicts that the food delivery business is still in a fierce
stage. competition. The majority of players continue to use discount and promotion
3. The regulatory requirement to tactic as a tool to gain a market share. In addition, the consumers still pay
control service can be a barricade. their great attention to the discounts, and the choice of restaurants in
For instance, the Price of Goods and
Services Act B.E.2563 (2020) will platform. Although a new arrival may trigger market with a different business
overshadow the food delivery model, for example, the superior application features different from existing
business on fee aspect. It is going to providers, or the service commission free to restaurants to attract more
affect the revenue of some platform suppliers. Those tactics can create an enormous challenge to the existing
providers.
operators who are forced to adjust their business model to maintain their
competitiveness. However, the existing operators already has a strong
restaurant network, a forceful rider system, and a gigantic customer’s
database, along with a continual marketing campaign. Those factors surely
make troublesome conditions to new arrivals to establish their successful
strategies to penetrate the market. The fact is that creating an attraction
to restaurant partners and new customers is not easy. As a result, the
market share between existing and new players for the remaining of 2020
to early 2021, may not draw any significant adjustment.

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