6/16/2021 [Press Release]: Food delivery in South East Asia grew 183% in 2020, accelerated by COVID-19, according to Momentum

Momentum Works - TLD by MW |…

[Press Release]: Food delivery in South East Asia grew 183% in 2020,
accelerated by COVID-19, according to Momentum Works
By Yorlin Ng - January 12, 2021

A deep dive into the Food Delivery Market in South East Asia (SEA) – Now and Post
Coronavirus

SINGAPORE, 12 January 2021 — Momentum Works is pleased to share our MW Food Delivery
Platforms in Southeast Asia report with the following key highlights: 

The total food delivery GMV in SEA reached an estimate of US$11.9bil in 2020, following a
183% year-on-year growth. Covid-19 proved to be a key accelerant for online food delivery
platforms. Refer to Appendix A below for food delivery growth 2018-20.  
Economic growth, urbanisation, and smartphone penetration provided the natural impetus for
growth. Three out of the six countries achieved 5X growth in food services spend per
capita over the last 20 years.  
The three largest food delivery markets out of the six researched markets in SEA are
Indonesia, Thailand and Singapore, contributing US$3.7bil, US$2.8bil, and US$2.4bil in
GMV respectively in 2020. It is notable that whilst Singapore’s population is 2% of Indonesia,
the country generates 65% as much GMV.

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6/16/2021 [Press Release]: Food delivery in South East Asia grew 183% in 2020, accelerated by COVID-19, according to Momentum Works - TLD by MW |…
Grab contributed close to half of the region’s food delivery GMV at an estimate of US$5.9bil.
The super app, which also offers ride hailing and financial services, leads in five out of six
Southeast Asian markets in 2020. This is followed by Foodpanda (US$2.52bil) and Go-Jek
(US$2.0bil). Refer to Appendix B for marketshare breakdown of food delivery players across
the 6 markets. 
As the region develops and disposable income increases, consumption of food delivery services
will continue to grow in the years to come. In the meantime, to drive greater penetration of
food delivery services in the region, players can look to:
Capture greater transaction volumes and density to balance against low food prices
Tailor food delivery services to independent restaurants with limited resources and
varying levels of technological and operational capabilities 
Invest in infrastructure necessary for food delivery services to scale and adopt localised
approaches to address market differences
Balance costs of running food delivery services against high growth to reach profitability
sooner 

The food delivery landscape in SEA remains competitive. Global and homegrown players have
adopted different strategies to power their growth in Southeast Asia. Global players like
Foodpanda and Deliveroo offer food delivery as a pure-play service, while Grab and GoJek
food delivery services are part of a much broader set of consumer offerings under respective
super apps. In-country players, including LineMan and Now, are part of a larger group/app
offering multiple services too.

Super App players like Grab and GoJek are able to convert existing customers from ride hailing
and leverage existing infrastructure including payment and despatching, and are therefore more
cost-efficient and therefore more sustainable in the region.  
In 2020, Foodpanda (together with its sister company Baemin) continued to focus on new
customer acquisition through heavy promotional spend, while Grab and Gojek both branched
into business-to-business services to capture new revenue streams. 
From a consumer perspective, selection, speed, quality/reliability and costs are the four
major value propositions. Players need to excel in at least two out of the four areas to satisfy
consumer needs – achieving all four is not feasible.  
Meituan’s success (net profit since Q2 2020) in China, a country where food and labour
costs are low, show that growth and profitability are not mutually exclusive for a super app. It
offers many lessons that the region’s  players could learn from.  

To achieve profitability and long term sustainability, platforms need to control

acquisition/retention costs, sustain their unit economics, and generate ancillary revenue
including advertising, financing and other B2B services.

About Momentum Works

A Singapore-headquartered venture outfit, Momentum Works builds, scales and manages tech
ventures across the emerging world, with a particular focus on Southeast Asia. Combining
strategic understanding/proprietary market insights, execution experience and a global
community, Momentum Works also consults on strategy, venture financing and other areas of
operations.

For more information

Please see attached with this release and the full report accompanying this release. For further
enquiries, please contact us at hello@mworks.asia

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6/16/2021 [Press Release]: Food delivery in South East Asia grew 183% in 2020, accelerated by COVID-19, according to Momentum Works - TLD by MW |…
 

Appendix A 

Appendix B 

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 hello@mworks.asia.

Related

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6/16/2021 [Press Release]: Food delivery in South East Asia grew 183% in 2020, accelerated by COVID-19, according to Momentum Works - TLD by MW |…

Food delivery in South East Asia Food delivery: what is unique SEA Food delivery platforms:
almost tripled in 2020, about each market in Southeast Your questions answered
accelerated by COVID-19 Asia? In "Food Delivery"
In "Report" In "Southeast Asia"

Yorlin Ng
Prior to Momentum Works, Yorlin was in the financial sector in SIngapore and Hong Kong for 10 years - working
with the Monetary Authority of Singapore, AXA and HSBC. She feels that corporate knowledge are undervalued in
the start-up ecosystem and want to change this. At Momentum Works, she manages operations, overseeing joint
venture operations with partners from all over the world. She always makes time to speak to people as you never
know what’s the next game changer in the fickle world of fintech, e-commerce or mobile internet. In her free time,
you can find her being the slave to her 5 cats.

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