Online Food Delivery Market Heats Up

The online food market has become more active

Dang Hoang Minh, the founder of Foody.vn, recently complained that rivals were trying to poach his deliverymen. 

The complaint and the big changes in the staff of companies in the business field show the stiff competition in the market.

An analyst confirmed that there is a ‘quiet war’ among logistics firms in the field of online food ordering. Only Foody, a website that helps customers find and rate entertainment venues and restaurants in Vietnam, has made investments in developing a delivery division of its own.

Because food items require good preservation and strict delivery times, and cannot be delivered with other products such as clothes and footwear, delivery firms tend to refuse invitations for cooperation from food companies.

Meanwhile, the demand for ordering food online and getting deliveries at given addresses in large cities has increased rapidly. According to Bamboo, the research division of Havas Riverorchid, 80 percent of surveyed people said they use food delivery services.

In the past, Foodpanda.vn, belonging to Rocket Internet, once had its own team of deliverymen, about 100 workers for Hanoi and HCMC. However, later, Foodpanda.vn changed hands as Rocket Internet met with difficulties in cash flow. Vietnammm.com, the new owner of Foodpanda, doesn’t have a delivery division.

However, Foody is no longer the only company which has a delivery division of its own. The market has seen a newcomer, Lala, a new project of Scommerce which operates under a shared economy mode. 

Meanwhile, a source said Grab Vietnam has begun launching a delivery service.

The source said both Uber and Grab plan to jump on the bandwagon as they have realized the great potential of the food delivery service market. 

The mobile phone-based apps UberEats and GrabFood, together with the skilled delivery teams UberMoto and GrabBike have helped them gain considerable market share in Hanoi and HCMC.

Luong Duy Hoai, CEO of Scommerce, thinks the value of the Vietnamese food delivery market, like the Chinese market, amounts to 6-8 percent of total revenue of the e-commerce market, saying that there are similarities in both Vietnamese and Chinese markets.

As for the scale of the online food ordering market in Vietnam, Euromonitor said the value is expected to be $33 million in 2018 and $38 million by 2020, while the growth rate is 11 percent per annum.

There is no official figure about market share. However, Doanh Nhan Sai Gon quoted its sources as saying that Now.vn is leading the market in number of daily orders. 

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Thanh Mai