Last Wednesday (31 Jan), we held our online briefing “In focus: Food delivery platforms in Southeast Asia 2024” where we covered global developments, key events, and trends within the food delivery landscape in this region. 

During the event, there were also many questions asked, and we’ve addressed them in this episode. Here are some highlights: 

  • Will we see Deliveroo or Doordash enter SEA?
  • With the rise in platforms take rate, can we expect a resurgence in dining out?
  • Why is the Philippines considered a special case?

Tune in to the full episode here:

Also available on Apple Podcast.

Featured materials: 

In focus: food delivery platforms in Southeast Asia, Momentum Works

E57 – The Impulso Podcast: [In focus] Food delivery in Southeast Asia 2024, Momentum Works

Food delivery platforms in Southeast Asia 2024, Momentum Works

[AI-generated transcript]

[00:00:00] Sabrina

Hello, everyone. Welcome to the impulso podcast. Today, Jianggan and I will be answering the questions we received from our latest event, Infocus Food Delivery Platforms in Southeast Asia. So last Wednesday on the 31st of January, Momentum works actually held an event in line with the launch of our fourth annual food delivery platforms in Southeast Asia report.

Both the report as well as the event recording will be linked in the show notes below. So do check it out if you guys haven’t yet. And of course, during the event, we received multiple questions, which we’ll be answering today. 


[00:00:30] Jianggan

So basically we, held an event where we explained I think some of the details and dynamics and of course the macro trends of food delivery sector in Southeast Asia in 2023 and as well as what we are expecting in 2024.

So we decided to play a gimmick and ask people what other topics they would like to talk about. And people wanted us to talk about the competition between TikTok and Shopee. So we decided to use that instead of answering questions, but we promised people that we’ll be answering the questions that they have raised during the event in a separate session and which is what we’re doing now right before Chinese New Year.

[00:01:06] Sabrina

So we’ll start with the more macro questions first before going to country specific questions. So the first question asked is, will there be any attack from Europe or the US in terms of Deliveroo or DoorDash entering Southeast Asia? 

We know that currently Deliveroo only operates in Singapore, in this region, and they have a pretty small market share of about 9%.

Yeah, that’s our estimate, yeah. Yeah, compared to Grab and Foodpanda, right? And we also mentioned during our event that DoorDash has had a really good 2023. We saw their share price more than double, their revenue grew pretty significantly, and they are continuing to increase its market share in the US. I think you mentioned there’s, their market share in the US now is about?

[00:01:46] Jianggan

Two thirds, like 66 to 67 percent. 

[00:01:49] Sabrina

Yeah, so pretty. stable in the U. S. now. And of course, in a recent interview, DoorDash CEO Tony Hsu told Financial Times that the company would expand out of the U. S. and out of restaurants. So, do you think that we would see the entry of DoorDash into Southeast Asia, or do you think Deliveroo would expand in this region?

[00:02:08] Jianggan

I think for a long time that there was always this discussion whether Foodpanda will merge with Deliveroo. And Deliveroo had operations in Singapore and Hong Kong, and two of the markets that Foodpanda has a significant presence. So, so also in 2021, I think when Deliveroo went IPO in London Stock Exchange Footpanda’s parent company, Delivery Hero, bought into, I think, about 5 percent of the shares.

So, there was expectation that, okay, these two might merge, especially when Deliveroo occupies the high end market in Singapore reasonably well. So we, I mean, over, over the years, we were researching for. The food delivery report. The food delivery platform’s report was spoken with many restaurants.

And many of the high end restaurants, as well as many of the wealthy customers, speak very highly of Deliveroo. And I think that’s the strategy and the positioning that it chose to be. But it’s also a sign that they were giving up the mass market because they realized that it was impossible to fight against Foodpanda and grab at the same time.

Would they expanded to Southeast Asia? I think, I think it’s quite unlikely because they already have had a test of Southeast Asia and they decided to retreat to the high end market. Which we know that outside Singapore probably you have a limited market in this segment in other countries.

So, so I think it’s quite unlikely that they are going to expand into this region. As far as DoorDash is concerned you know, we spoke with lots of ex and current Meituan executives, and they’re all telling us that DoorDash has learned a lot from Meituan in terms of operations, in terms of strategy.

So I’m not sure whether DoorDash is learning from Meituan about their assessment about Southeast Asia market, which is, it is quite hard to, to fight against a strong incumbent, which is Grad, and and make it profitable at the same time. So And, and also, you know, that DoorDash bought this I think it’s a Finnish company bought.

So that, operates in multiple countries in Europe. If I were DoorDash, I would probably come to the conclusion that all the players in Europe function more like private, I mean, maybe with the exception of Deliveroo, and many of the other players actually function pretty much like private equity rather than operators.

So, so I do think that DoorDash might have a I mean, as their founders are very, very sort of on the ground operation focused and that this market will probably deliver like sort of higher basket size as well as was higher revenue for them. So I doubt whether they were focused on Southeast Asia. 

[00:04:43] Sabrina

I think because we’ve also mentioned multiple times that operating in Southeast Asia operationally, it’s quite challenging for a lot of these companies.

Right. And you mentioned that. Previously, people were asking or wondering if Deliveroo would merge with Foodpanda. And now we see that Delivery Hero is actually trying to divest Foodpanda in the region as well. 

[00:05:01] Jianggan

Yes. And also Delivery Hero sold a stake. I think it’s in the process of has confirmed the sale of a stake in Deliveroo.

And I think they’re selling it at like 70 percent loss. After two years so that means that the company is, I think, in a disciplined way pursuing its strategy of exiting markets and investments, which they don’t think make sense for them. And that’s, that’s also private equity strategy as well.

So, they were probably to focus on a few more promising markets. And I think based on the sense that you see from outside Southeast Asia, it’s not their focus. 

[00:05:40] Sabrina

So the next question we received is when the take rate of these food delivery platforms increase buyers would have to pay more and if the costs increase do you think the habit of buying food directly at the restaurant would be back?

So Just to give you guys some reference this is from our latest apples to apples 3. 0 report, where we calculated the take rate of a few food delivery platforms. So as of Q2, 2023, the take rate for grab and delivery hero is about 23 percent on average for Uber and Zomato. It’s about 19%. And we’ve definitely seen the trend of these take rate rising over the years, but they have seemed to stabilize.

In the past year, and for reference, Meituan, China’s biggest food delivery platform, its take rate is only 13. 7%. 

[00:06:30] Jianggan

That’s from which quarter? That’s from last year? 

[00:06:32] Sabrina

Q2, 2023, 

[00:06:33] Jianggan

yeah. So that has already, that had already increased because I remember in the past, Meituan’s 12, 11 something percent? Oh yeah, yeah, 

[00:06:40] Sabrina

it was, it increased a bit last year.

[00:06:42] Jianggan

It had increased, but I was, it was interesting, like when a few investors who are very familiar with Meituan first came to look at platforms in Southeast Asia, they were amazed saying that, wow, how can you charge such high take rate? There are lots of issues, I mean, structural and and also a sort of, sort of market competition, which makes it quite hard for platforms in China to charge a high take rate.

I mean, not only Meituan, Alibaba, et cetera, as well. Coming back to, to the question of course, when you try to take a bigger pie from the the food purchases I think it creates this incentive for restaurants to work with the apps, right? I mean, they will find ways to give direct discounts or incentivize people to, to, to work without the apps.

And and also I think I think buyers do not care about take rate. Take rate is technically mostly charged to the restaurant, but they do care about, I mean, delivery fees. This is what they feel directly, because, I mean, if you, we, we look at Meituan in China, mostly. Most of the time, for the same dishes we order online, it’s actually cheaper, especially for lunch, it’s actually cheaper than if you go to an offline restaurant, so that’s very different dynamics.

So we do think that the increased price would, make some buyers want to buy. Walk a few extra steps to go to the restaurant to, pick up himself, et cetera. I think that’s also the reason why why the leading platforms such as Grab, they are actually focusing a lot on dine-in, right?

I mean, dine-in vouchers. Yes. Yes. So, in a way to help help restaurants to attract customers to the restaurants, because we know that. I think, in 2023 , the food services volume bounced back quite a bit while food delivery remained pretty stagnant, GMV. So it’s like a single digit growth, right?

So, definitely that that more people are consuming food offline.

[00:08:32] Sabrina

So I think that’s why we see a lot of platforms trying to tap into dine in, right? I mean, not just grab, I think Foodpanda also offered dine-in now. 

[00:08:40] Jianggan

I think, it’s natural evolution, right? You, have built a platform linking sort of consumers, diners with restaurants. And of course you want to capture multiple channels that they can interact with each other.

[00:08:51] Sabrina

So maybe let’s move into more country specific. Questions. So our first question is about Vietnam and in our report, we estimated that Vietnam had the largest GMV growth in the region. It grew by almost 30 percent year on year, right? Whereas the other five countries in the region had very moderate growth of maybe one digit growth, single digit, single digit growth. So do you think there’s any reason why the Vietnam food delivery did so well in 2023, despite the poor macroeconomic environment? And the commenter said that it seems like consumer sentiment is reasonably healthy in Vietnam as well as e commerce players also seem to be doing well.

[00:09:30] Jianggan

Well, yeah, we know Tiktok shop is doing exceptionally well in Vietnam and as a market, we know that consumers in Vietnam are actually very price sensitive since the beginning. But when it comes to the growth we have to actually see that both leading players Grab and Shopee food actually grew.

Quite significantly in Vietnam. So, so I would see that as a natural extension because we look at the whole market. Vietnam is still the smallest in Southeast Asia. And historically, I think many platforms didn’t really spend much time and energy in Vietnam. So. Of what we saw in 2023 was of course first expansion into smaller cities and and second is that platforms looking for growth.

I mean, of course they look at saying, Hey, there’s still market, which is untapped. And, and also I think there was quite a bit of focus on to how to optimize the operations there as well. So, so yeah, I think being the smallest market and where there’s still a lot of demand and even when we look at the macroeconomy, of course we’ve heard lots of negative news.

About the FDI etc in Vietnam, but the economy was still growing at like 5 percent and was lower than, of course, everybody was expecting like 6. 5, 8, but 5 was still, still a healthy growth and still ahead of many other countries.

[00:10:46] Sabrina

I think it’s interesting you mentioned about expansion into small cities because during our event, we also held a poll, right?

Asking our participants, where do they think platforms can find growth? Is it in major cities, expansion into smaller cities, or tourists? And majority of them actually felt that expansion into smaller cities would have the biggest potential for food delivery platforms, right? About 50 percent of the audience chose this, so Do you think that’s a strategy that a lot of these players are employing, especially in markets like Vietnam?

[00:11:18] Jianggan

I do think in Vietnam, certainly there has been quite a bit of expansion into smaller cities. And we do see that some of the players in other countries, I think Grab still has a few cities which they have. Not yet penetrated in Thailand and the shopping food was trying to expand into more cities in Indonesia as well.

Whether smaller cities or population in major cities would have a bigger potential for the platforms. So we, we put that questions for people’s perspectives. And the truth is that we have not done enough detailed research to, to understand, I mean, which one would give them the detail sort of more.

More upside. But we do know that these two markets are very different, right? So, when you, when you’re expanding into the big cities you are touching a demographic that you were not previously touching. So that’s why you see there’s quite a bit of segmentation of the consumer base that’s happening.

I think more can be done there. So when it comes to smaller cities, I mean, when you set up the, the, the, the school infrastructure, we try to manage the people in such a way, we look at the density, it can be quite different from the, from the large cities. So that, that, I think that requires a, a different look at how operations can be run, which I think most of the platforms in the region would have already have had a bit of experience.

Foodpanda was in, I think all the small cities in Malaysia. And I think as well as Thailand for a while but of course they lost quite a bit of market share in Thailand last year. The last thing which which we put in the poll was tourists. Yes. So, Lineman took the effort of building a mini program on WeChat and to allow Chinese tourists to to order food in Bangkok, and I think they even took the effort to, translate.

I don’t know where there’s all the restaurants, but I’ve checked like quite a number of restaurants in Bangkok. All the menu were translated into Chinese, like all the menu. But I don’t know how standard Thai food is, right? Like do batch translation, maybe? Yeah, 

[00:13:14] Sabrina

I feel like you can do batch translation.

I think when I went to Thailand, it was quite easy to order food delivery as well. Yeah. Yeah. I can’t remember how we did it. Maybe we use Google Translate. 

[00:13:27] Jianggan

So, happened was that there was not enough tourists coming back to Southeast Asia from China last year. This year we’ll see a few changes, right?

I mean, the visa free arrangements between China and the three key countries, I think Singapore, Malaysia, and the Thailand would that bring more tourists to region and how much of that would actually contribute to the, to the volume of the platforms. So that’s something interesting to watch.

But but these are not consumers who will stick with the platform. This will contribute a volume, but it’s not as individual users, not someone you can continuously monetize. So it’s different. 

[00:14:02] Sabrina

So another country that we mentioned was interesting to look at was the Philippines, right? We mentioned that it’s a special case because Although we can sort of estimate the GMV of food delivery platforms, we know that Philippines have a lot of restaurant owned delivery services, right?

[00:14:19] Jianggan

Like it’s owned by QSRs, right? 

[00:14:21] Sabrina

Yeah. So for example, we, I think we mentioned Jollibee as well. Yeah. And somebody asked that if we conducted any research on Jollibee’s in house delivery platforms, and why do we think Jollibee It’s so successful. So for just for a little bit of background, the food delivery platform, GMV in Philippines was 2. 4 billion and the Jollibee sales was 4. 2 billion. So that kind of shows you the scale of Jollibee in Philippines. 

[00:14:50] Jianggan

As I mentioned in the event, Liz and team actually have done a research on QSRs in the region, not specific to delivery, but looking at overall picture. So some of the QSRs are pretty sizable, but of course Jollibee beats all, right?

And it’s really dominant in the Philippines. There are a few other like large players, but the Jollibee’s volume is really, really high. I, I remember for a time in the past because I used to do for delivery back in 2015, I remember I was talking to some of the QSRs in this region. Many of them were actually running their own delivery operations because at that time there was simply no third party fleet, which you do at scale, right?

So, so there were lots of operational problems. And I remember back then. They were bringing like sort of consultants and experts from other countries like the U. S. and Australia where they had to be running the delivery operations for longer to fix all these issues. I think, I think in different countries and different players, they eventually choose the different strategy of whether to work with a food delivery platform or whether to build their own delivery operations or a bit of both.

I think in the Philippines with Jollibee’s volume, obviously if they can manage that operations if they know how to manage the people, build a systems there’s no reason why they can’t do the delivery operations on their own. So we have not studied too great detail about the operations of theirs, because because this report that we spent quite a bit of time to, to come out with is focused on food delivery platforms.

But what we will do in 2024 is that we’ll look more into F& B and new retail sector as a whole, because we believe that there’s lots of interesting things happening there. And then we, I think throughout the year and through the podcast, the reports, we’ll share more information about QSRs, about, I mean, for certain Jollibee.

And as well as more about all this Chinese fast food chains, which are expanding to Southeast Asia. 

[00:16:46] Sabrina

We might be doing a F& B immersion to China as well, right, in Q2. 

[00:16:50] Jianggan

That was not a food trip. That’s, that’s a trip for you to, I mean, of course, 

[00:16:53] Sabrina

We can see the food and learn. 

[00:16:55] Jianggan

You can, yeah, you can look at how, they manage.

And actually yesterday I went to a event sharing by a famous entrepreneur in Singapore who had built a number of brands. And the one person in the audience was asking him a very short question. He said, look I’ve been, You know, building retail brands in Singapore for 20 years, I mean, not as successful as you are, but fairly sort of profitable.

But , recently I see like in multiple categories, I see competitors coming from China and and these guys are operationally very efficient and they rely on a supply chain as well as the larger operations in China to, to get the volume. So I find it very hard to compete against them. And I, I think.

I think that guy probably senses this threat earlier than many, many people. So the answer from the guy on the stage was, was maybe should move upstream and, and because you know that when you try to compete against them on value for money, you will not win because they have the large supply chain. So maybe you should move some more to more premium brand, some brand which is associated with, I don’t know, like, you know, a story, like, I don’t know, like health supplement from Switzerland. 

[00:18:06] Sabrina

But we do see premium brands, premium Chinese F& B brands coming into South Asia as well, right? Like? Haidilao. Haidilao? Hey Tea, Hey Tea 

[00:18:16] Jianggan

Haidilao. Yeah, Haidilao is for mass market, and Hey Tea is expensive, but it’s not, not exactly like, you know, premium, premium, right?

[00:18:25] Sabrina

But we also said in our food delivery report that although F& B spending has grown, premium brands Especially those in Singapore have said they felt otherwise, right? Probably because of the macroeconomic environment. 

[00:18:36] Jianggan

There’s a, this Japanese restaurant in in Singapore. What is that? Around, around Tanjong Pagar area. The name is extremely Japanese. Everything looks Japanese. But it’s an outlet of restaurant from Beijing. Yeah. And a friend of mine tested it and then he realized, Hey, the name sounds very familiar to a restaurant that he’s familiar with. They were asking the, the restaurant manager. So the guy said, Oh yeah, we’re a branch because. So many of them might be here, but you’re not just, not aware of their origins. 

[00:19:06] Sabrina

They’re branding themselves differently. 

[00:19:08] Jianggan

And of course, I mean, if you say that I’m a Chinese restaurant selling sushi. That’s not quite right. 

[00:19:14] Sabrina

That’s something I would see in Europe or America.

Okay, so our last question is, For the country focused players, what should be the suitable playbook to achieve both growth and profitability? So, during the event and in our report, we mentioned that, obviously, For last year and this year, growth and profitability has been the key focus for a lot of these companies, right?

Especially as most of them have achieved some level of profitability. So what do you think is a suitable playbook for them to balance between the two? I 

[00:19:44] Jianggan

think at the end of the day, so it goes back to the issue of Southeast Asia being complex fragmented. And very diverse, right? So when we look at country focused players, you have lineman in Thailand and Robin Hood as well.

Of, of course you have I, I can gojek in Indonesia. They have a bit of operations in Vietnam, but you can largely look at them as Indonesia focused player, shopee food. Of course Indonesia in Vietnam functions are a separate app and the operations that they have acquired, which have been running for quite a while, quite a while.

So I would think that each of them would have different strengths. And I think Gojek is relatively independent. They’re trying to create an ecosystem. Lionman theoretically has Lime, which basically covers every single user in Thailand to tap into. And of course, Shopee Food has Shopee to tap into.

And so this year we noticed that Shopee Food, even though they don’t get mentioned at all, They actually grew quite a bit, right? They actually grew quite a bit so being absorbed into, into Shopee and as opposed to being a sort of independent segment of the business, which, which which, which the C group management would talk about.

So they actually grew a lot. So, so that shows that the power of being affiliated to a large, large platform as, as far as, as the playbook is concerned, I think for these three countries, the playbook would probably be different. But I think what would be common is is look at what your strength is and what kind of ecosystem you can tap into and what other values you can build, because I think just for delivery alone, earning a take rate would not be enough for them.

[00:21:12] Sabrina

And I think it’s not just on the strategic level, right? Something I feel we mention a lot when we talk about food delivery is execution. It’s not just on a strategic level, but they have to be able to execute it well and across the regions that, across the countries that they operate in. Is that, 

[00:21:26] Jianggan

is that Grab who mentioned in one of the I think it was Grab.

One of the journalists said that it was just relentless executing. And nothing exciting and, not nothing exciting, but the. But instead of pursuing like lots of far fetched ideas, but but just, just really, really make sure that you set milestones and you can achieve these milestones and eventually achieve, like, you know, positive net income and a positive free cash flow.

Then that’s a time that you can probably Explore more farfetched ideas. 

[00:21:54] Sabrina

So thank you guys for tuning into another episode of the impulso podcast. We hope you enjoyed today’s episode, and if you did, do like our podcast and follow us on Spotify Apple Podcast or your preferred podcast platform to stay up to date on the latest happenings and trends in tech, new retail, and the broader digital economy.

[00:22:10] Jianggan 

Thank you. And we have to say happy Lunar New Year. 

[00:22:12] Sabrina

Oh, yes, . Okay. Happy Lunar new Year to those who celebrated. Yeah. Okay. 

[00:22:16] Jianggan


Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].