Grab and Foodpanda, two Singapore-based food delivery services, are extending into the realm of dine-in service as consumers start resuming their usual habits and venturing out to dine more often.When CNBC questioned Sachin Mittal, the head of telecommunications, media, and internet sector research at DBS Bank, about the trend, he stated that it a regular practice. Moreover, the Benchmark Company, an investment banking firm, published a report in April that predicted a 13% compound annual growth rate in the food delivery industry through 2025 as a result of the increase in customers dining out.
Grab and Foodpanda, two Singapore-based food delivery apps, are broadening their services to include dine-in experiences, following greater demand from customers wanting to eat out post-pandemic. Grab is testing out the feature in 15 cities in Singapore, Thailand, and Indonesia, offering discounts of up to 50% on pre-purchased vouchers. Moreover, users can access restaurant menus and reviews, place orders and pay digitally, and book rides to restaurants. The company aims to further extend its dine-in feature to Malaysia, the Philippines, and Vietnam.Foodpanda was the first to introduce dine-in facilities in Singapore this year. To date, Foodpanda Dine-in is offered in Singapore, Thailand, the Philippines, Malaysia, Hong Kong, Pakistan, and Bangladesh, with discounts of 15-25% found in over 8,000 restaurants across these countries. Jakob Sebastian Angele, Asia Pacific CEO at Foodpanda, stated during a media briefing last week that "We triggered the discussion already during the pandemic. And of course, we knew back then already, that there will be life after [the pandemic]."
Grab and Foodpanda are exploiting the rise in customers wanting to dine out following the pandemic, by expanding their services to include dine-in options. Grab is currently running trials in 15 locations in Singapore, Thailand, and Indonesia, including discounts of up to 50% on pre-purchased vouchers. Users can review restaurant menus and reviews, order and pay electronically via QR code, and book rides to the restaurant. The company plans to roll out the dine-in feature to Malaysia, the Philippines, and Vietnam.Foodpanda was the first to introduce dine-in services in Singapore in 2021, now available in Singapore, Thailand, The Philippines, Malaysia, Hong Kong, Pakistan, and Bangladesh. 8,000 restaurants in these countries are offering discounts of 15-25%, with Foodpanda's Asia Pacific CEO, Jakob Sebastian Angele, noting that the idea was already being discussed during the pandemic, expecting life to return afterwards.
Angele commented that Foodpanda perceives "a tremendous capacity in dine-in", and that it could become "really big" for them. Although food delivery still remains Foodpanda's main source of income, followed by grocery delivery, Last week they declared a partnership with Singapore-based restaurant solutions provider TabSquare to facilitate automated food ordering through digital menus, QR ordering and more. TabSquare was completely acquired by the parent company of Foodpanda, Delivery Hero, in 2021. In June, AirAsia Food, a food delivery service, began its dine-in service in league with eatigo, a restaurant reservation platform. In Thailand, they even offer a queuing service, where customers can hire riders to queue up for them at eateries.
Tay Chuen Jein, the head of deliveries for Singapore at Grab, expressed at the time of the launch of GrabFood's Dine-in service that providing these discounts "aids in making eating out more cost-effective." He stated in a press release that "it not only helps our users find restaurants to go to, but also makes dining out more cost-effective as our partner merchants advertise attractive dine-in vouchers that can be bought on the app."Jonathan Woo, a senior analyst at Phillip Securities Research, observed that with the growing costs of dining out due to higher inflation, "consumers are also looking for discounts to save money anywhere they can, and having a nice meal at a cheaper price brings immense joy."He added that Grab can "gain indirect revenue from dine-in services." In this sense, revenues are obtained from commission fees for every dine-in voucher purchase."Enhancing monetization from long-standing users is more economical, as well as raising attention for F&B merchants," said Woo.
An April report from investment banking firm Benchmark Company noted that food delivery had seen impressive growth in the last three years, but that the 50% compound annual growth rate had been slowing as people began to dine out more often. They projected a more moderate 13% CAGR (Compound Annual Growth Rate) through 2025. Grab's CFO Peter Oey pointed out during the first quarter earnings call that there was a 9% decline in deliveries gross merchandize volume year-on-year, yet deliveries transactions had rebounded at the end of April and into May. Chinese tech giants such as Alibaba and ByteDance have shifted to offering local life services, like food delivery, in-store dining, travel booking and group buying. Meituan, for example, provides customers with dine-in vouchers. Sachin Mittal from DBS Bank observed that food delivery apps were trying to promote dining both in and out, which was to be expected and would increase their margins.
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