[2021]

[THE POTENTIAL CHANGE OF FOOD

DELIVERY MARKET AMONG THE
COVID-19 PANDAMIC]
ASSIGNEMENT 2
SEMESTER 2 – 2021

Name: Chi Nguyen Linh

Class: DBA36B

ID number: 21063237

In the crisis of the Covid-19 pandemic, the Online Food Delivery market in Vietnam has had a
go against the tide among the general market. Comparing to the other markets such as
hospitality, bars, clubs that have been negatively impacted by Covid-19 in Vietnam, Online Food
Delivery has positive changes in both supply and demand.
The online food delivery market in Vietnam is considered to be the most potential and
fastest-growing market because even the tension of the covid-19 pandemic has not reduced the
demand for food of consumers but even higher. According to Statista, the online food delivery
market revenue reached about 302 million USD in 2020 (Dan Tri, 2021)  and continues to grow
strongly post-pandemic. The food delivery system has two main sources: one is the restaurant's
own delivery; The second is through online delivery applications. On the online food delivery
market, there are 5 most famous brands: GrabFood, NowFood, Baemin, GoFood, and Loship.
According to 2020 statistics, Grabfood holds 33.38% of the discussion market share - leading in
the market, followed by Nowfood, Baemin, Loship, and Gofood with a discussion share of
23.16%, 21.95%, 15.14%, and 6.37% respectively.

https://e.vnexpress.net/news/business/data-speaks/food-delivery-a-mainstay-for-vietnamese-
urbanites-amid-covid-19-crisis-4099471.html
This is the article that mentioned the market shock of the Food Delivery market.

During the period of Covis-19 social distancing, people are not allowed to go out to use on-site
food services, the dine-in facilities of restaurants must be temporarily closed to mitigate the risk
of infection, only take out or delivery. The demand for food increased higher than usual due to
people's stay-at-home mentality for too long, leading to stiff competition between delivery
service apps.
Price

P2
D2
P1

D1
Q1 Q2 Quantity

The increase in demand causes the demand curve on the graph to shift to the right, from which
the cost of shipping fees and output also increases. As customer demand for online food delivery
changes positively, service providers have to pay more shipper wages and other fees, leading to a
slight increase in shipping costs. 
A sudden increase in demand, 5-6 times higher than before the gap, leading to supply-
demand gap, price changes, and especially lack of transportation resources - shippers, leading to
the market shortage - the quantity demanded is greater than the quantity supplied. Due to social
distancing in accordance with directives 16 and 12, in Ho Chi Minh City only 10% of the previous
employees worked; in Hanoi only 2 thousand shippers and not always 100% involved in
shipping (Ha, 2021).  AhaMove - a leading corporation in the field of transportation is trying to
control the ceiling price - the maximum price that sellers can charge for the service - not more
than 1.5 - 2 times. The reason is that the shipping cost is not fixed but increases or decreases
depending on the time, weather, and supply/demand of the day (Ha, 2021). Although
transportation fees change frequently, consumers are still willing to pay for their food.
Consumers have only a little reaction compared to the increase in shipping costs by 2-3 times.
Proving consumer demand for an online food delivery service is inelastic; food and drink are
now really essential necessities during the stressful epidemic season. Door-to-door
transportation avoids the increase of the epidemic and ensures the health of each person.

Price
 P2

P1

Demand

Q2 Q1 Quantity

     The impact of Covid-19 not only affects the demand, price, ... in the market, but it also
contributes to the change in the market entry rate of online food delivery.

The market entry rate of online food

delivery
12.00%
10.40%

10.00%
8.80%

8.00% 7.10%

6.00% 5.50%

4.10%
4.00%

2.00%

0.00%
2017 2018 2019 2020 2021

In the period 2020 - 2021, the market entry rate is 7.1% - 8.8%. Compared with the period 2020
- 2019: 5.5% - 7.1%, the ratio of the period 2020-2021 was 0.1 greater. This market during the
epidemic period has become a potential market and attracts domestic and foreign investors, the
reason is that the food delivery market is still a small-scale market with the development of
society in the use of electronic applications such as electronic wallets, mobile banking,
convenient for transactions. Typically, in early 2019, Korean investor - Baemin, joined Vietnam
and is highly appreciated, so far Baemin has accelerated to become the second brand in this
market of Vietnam. Recently, a domestic investor, Zalo, has quietly brought ZaloFood into the