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23 Dec 2021

Econ Digest

Food delivery set to post steady growth at 4.5% in 2022…Service providers penetrate upcountry to expand new customer base

คะแนนเฉลี่ย

        The COVID-19 outbreak, lockdown restrictions on the restaurant business and work-from-home policies will likely cause turnover in the food delivery business (a new base, which includes bakeries and beverages) to grow more than 46.4%YoY during 2021. For 2022, KResearch has used the data compiled in collaboration with LINE MAN Wongnai along with the market data to assess the food delivery business, and the results are as follows:  

        The food delivery business in 2022 is projected to improve as food delivery platforms are set to expand their marketing area and continuously introduce marketing promotions. The food order transaction index in 2022 is projected to stand at 477 (against the 2021 base of 100), an increase of 2.9%YoY, which would be at a slower rate compared to 2021. Cost or food spending per order is projected to increase, as well, but at a moderate rate, amid intense competition and fragile purchasing power. The average spending per order is estimated at THB193, increasing from THB190 in 2021. Moreover, turnover in the food delivery business will continue to grow, but at a slower rate, due to the increases in volume and spending per order. Given this, KResearch expects that turnover in the food delivery business (a new base) will reach approximately THB79 billion in 2022, an increase of 4.5%, which would be lower than the higher base of 2021. However, if the impact of COVID-19 caused by the new Omicron variant is severe, turnover in the food delivery business may increase faster than estimated. Additionally, KResearch expects that certain types of eatery such as limited-service restaurants (burger, pizza and fried chicken) and street food vendors will outperform others because food delivery platform service providers tend to place emphasis on marketing such restaurants. Moreover, they prefer to include such eateries as part of the efforts to expand the restaurant portfolios on the platforms.  

        In summary, amid eroding consumer purchasing power, rapid changes in consumer behavior, and increased competition, restaurant operators will continue to rely on food delivery channels to stay afloat. They may have to promote quality food products that are value for the money and unique while also tapping lucrative targets. Concurrently, they have to ensure that their cost management (related to raw materials, labor, central kitchens and sales channels) remain efficient so that they can maintain cash flow and profit margins.

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Econ Digest