At the end of the day, it is undeniable that the food delivery market in Singapore is booming and this the increasing demand makes it attractive for many major players to exist. According to database company Statista’s latest report, the revenue in the online food delivery segment amounts to US$342 million in 2019.
Maybe you order food deliveries through Foodpanda from time to time. Maybe you use Deliveroo as your favorite food delivery app to have your ordered food delivered to your doorstep. Maybe you feel hungry at night sometimes and make a food delivery order using GrabFood.
With the world (of food) at our fingertips, the gross revenue in Singapore’s online food delivery segment is expected to show an annual growth rate of 14.8 percent, resulting in the total market volume of US$593 million by 2023.
The food delivery service is a classic example of “a network-driven, double-sided business model,” says EY Global Emerging Markets Leader for Consumer Industries Mr. Chandan Joshi.
- THE FOOD FIGHT
The Food Fight
The rising demand for the food delivery market and the growing base of digital consumers come with the battle in a brutal environment among different players in Singapore, namely FoodPanda, Deliveroo, honestbee and GrabFood.
A recent study commissioned by Deliveroo found that 69 per cent of consumers in Singapore order food through food delivery apps at least once a month. However, this seemingly promising food delivery market comes with high customer acquisition cost, as many competitors are vying for a slice of the pie — because market share is key.
When it comes to choosing an app to use, the study found that the top reasons influencing Singapore consumers are the availability of regular promotions, variety of food options, and efficiency of the delivery service.
Despite the trends in the popularity of and demand for food delivery, price wars among the food delivery companies are inevitable, which means most of their businesses take a serious hit in order to survive.
While FoodPanda and GrabFood did not reveal their financial data, Deliveroo is perhaps just beginning to emerge from its losses, based on its recent financial statements. After hitting a net loss of S$16.86 million in 2016, it reported that its Singapore revenue hit S$26.4 million last year, but did not elaborate whether it had reached profitability.