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5 Aug 2020


Food delivery businesses set to expand due to intensifying competition post-COVID-19; while big operators set sight on shaping their platforms into ‘Super Applications’ (Current Issue No.3128))


            The COVID-19 pandemic and resulting stringent countermeasures issued by the Thai government have resulted in temporary closures and limited business operations. Restaurant business, in particular, was for a time left with two options: takeaway and food delivery via mobile application, which has now become a major retail channel for both restaurateurs and consumers. As a result, order volume for food delivery via online platforms has grown exponentially – by 150 percent – compared to the same period in 2019.

            Regarding the direction of the food delivery market for the remainder of 2020, restaurant business is expected to resume regular operations post-COVID-19, which would result in a lower frequency of food delivery in comparison to the outbreak period, but relatively higher than the pre-pandemic period. However, if the virus were to return in a second wave, there is a likelihood of increased online transactions. For 2020 as a whole, KResearch projects that the number of food deliveries will be in the range of 66-68 million orders, or growth of up to 78.0-84.0 percent, which is a tremendous leap upward compared to the previous year.

         ​    The popularity of online food delivery services has attracted new players who are keen on presenting new business models to set themselves apart from the competition. These new entries will likely intensify the level of competition among food delivery platform operators, a market which is now dominated by four main players. Meanwhile, consumers are still drawn to discounts and the variety of restaurants to choose from on each platform. Therefore, new operators are expected to face difficulty in carving out a larger market share and establishing business partnerships with established operators. Consequently, there is unlikely to be any significant change in the market shares among old and new players over the rest of 2020 through early 2021, just as the existing platform operators continue to evolve into 'Super Applications'.