On 24 January, our senior analyst Crystal Yu appeared on CNA’s Money Mind radio show to talk about the food delivery industry in Southeast Asia.

The interview, hosted by Andrea Heng and Stanley Leong, was centred around Momentum Work’s 3rd annual Food Delivery Platforms in Southeast Asia report.


Here’s what was discussed during the interview:

Q: What are some characteristics of the more popular food delivery platforms in Southeast Asia?

A: Efficiency is definitely the key as customers naturally expect their food to arrive fresh, and riders want the quickest routes to maximise their earnings. Another key characteristic is a stable cash position, especially in a difficult capital market. It’s important for platforms to meet existing financial obligations and plan for the future.

Q: How can smaller players gain a competitive advantage on larger platforms to attain similar success?

A: For smaller players, if they focused on a smaller sector focusing on providing efficient services to a specific group, they would gain an advantage compared to bigger players.

Q: Why have larger markets such as Singapore, Indonesia and Thailand recorded GMV declines in 2022, and why have smaller markets such as Malaysia, the Philippines and Vietnam have experienced GMV growth?

A: There are factors such as the reopening in Singapore shifting food service demand offline, while in Thailand, government subsidies were removed after October, and the floods in the second half of the year playing significant roles. In the smaller markets, the dominant players like Grab and ShopeeFood have expanded their penetration into the market, contributing to the growth in these areas.

Q: What are the flaws or disadvantages of super apps such as Grab and Shopee which have dominated the digital services market?

A: Under this current capital environment, these super apps have pressure to reach profitability. These super apps offer different kind of services and in this situation, they need to strategise how they will balance the services they wish to offer. For example, Shopee went strongly into food in 2021, but in 2022 they shifted their focus back to their core business, ecommerce. It’s more about how they decide which service they want to focus on the most.

Q: Delivery platforms are realising the importance of delivery infrastructure. What new models did you observe in regards to delivery infrastructure?

A: We observed fragmentalised digitalisation in the industry, so we are seeing a lot of platforms acquiring restaurant solution companies to strengthen their grip on merchants. In China, Meituan took the initiative to consolidate all the systems together, but in it might still be early in Southeast Asia.

Q: How do super apps like Grab fare against traditional supermarkets in the grocery sector?

A: Last year, we saw a huge investment in dark stores from super apps, and it proved to be very challenging. For example, a customer could order an item online, and the rider would travel to the dark store only to realise that the item was not available. In Southeast Asia, Grab and Foodpanda either stopped or scaled down their dark stores in some markets, but the grey modell could be viable, where customers can order items online and pick them up immediately.


You can find the interview here.

For more in-depth articles and reports on the food delivery industry, click here.

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].