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16 Dec 2022


Food delivery business in 2023 may decline: Maintenance of sales turnover is a challenge (Current Issue No.3371)


        Thailand’s food delivery market is expected to see a slowdown due to increased economic activity and lifestyle changes that are seeing many more consumers return to dine-in and takeaway options. KResearch projects that market value of food delivery business going forward will be static or drop when compared to the high base of 2022 due to numerous factors such as less-frequent use of food delivery service. As reflected by survey results, from the beginning of 2022 until the present, more than 37 percent of respondents reduced their frequency of service use in line with the further easing of COVID-19 curbs. Basic foods and fast foods remain preferable among consumers. Meanwhile, foods and beverages that have seen a decrease in online orders were drinks and bakery products, as consumers can enjoy convenient purchases when returning to work at the office. Average price per order tends to be stable or higher as costs of raw materials and energy prices are rising, possibly resulting in an increase in food price per item and service charge on average.

        However, the habits of certain consumer groups and ongoing marketing campaigns introduced by food delivery platform operators would drive steady service use, but the number of orders may fall when compared to the high base of 2020-2022. As a result, food delivery platform providers need to adjust strategies in order to maintain their competitiveness. Focus should be on market expansion across provinces and engagement with existing customers by offering monthly packages to boost continual use. They may also branch out to offer related services such as handy grocery services. Meanwhile, the recovery of economic activity may help some operators who have embraced business diversification strategy gain benefits from other businesses related to consumer activities such as restaurant management systems, ride-hailing services and hotel booking services.

        Based on these factors, KResearch projects that market value of the food delivery business in 2023 will reach around THB 8.1-8.6 billion, falling by 0.8-6.5 percent (from the high base of 2022). However, the figures remain higher than pre-pandemic levels on average. The contraction is in line with the online food delivery industry in many other countries that has declined following the easing of the COVID-19 pandemic.

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