Vietnamese consumers willing to spend more on online food

Quality and food safety are key points for the positive growth of food delivery.

The market for food delivery and fresh food has never seen steady growth in the number of orders before even though many eateries and restaurants have resumed on-site services in recent months.

Covid-19 has changed the consumption habits of many people, in which online food has become popular among local consumers and merchants in big cities like Hanoi and Ho Chi Minh City, according to food delivery platforms.

A Hanoian seller at Hang Chieu Street, Hoan Kiem District, who is the owner of one of the best shops making sweet glutinous rice doughnuts, said that through food delivery applications, the business has seen a sharp increase in the number of orders when the Covid-19 restrictions were over.

“Sometimes both online and take-away orders are overloaded, we even have to temporarily stop selling on ShopeeFood app to ensure the quality and services. Because delicious food is required to be served hot,” she told The Hanoi Times.

The merchant found food quality and safety are key points for such growth. “Buyers rank our shop highly after tasting the food we make. Our high ranking also comes from our efforts to keep the quality of products and service over time,” she added.

This is one of many eateries earning the top five-star ranking by customers on ShopeeFood as well as a contributor to the growth of this app during the pandemic.

Since restaurants/diners have been able to resume operations under certain conditions in accordance with pandemic prevention guidance, ShopeeFood recorded growth in the number of visitors and user demand on the platform in recent months, focusing on main services: food (food delivery) and fresh (grocery shopping assistance), a representative from the platform said. The value of an order varies based on the promotion collections.

For example, on November 11, the number of users accessing the app during peak hours from 11 am to 12 pm increased by six times during weekdays. In the 11.11 ShopeeFood Super Party, Hanoi, Ho Chi Minh City, and Danang were the three cities with the most orders. 

“This emphasizes the growing importance of food delivery platforms in the new normal across the country,” a representative from ShopeeFood told The Hanoi Times.

Another food ordering platform, TikiNGON, owned by Tiki e-commerce platform, said the number of fresh food orders remained stable with a high proportion in the post-social distancing period. The average order value remains at VND200,000-300,000 (US$8.8-US$13.2), especially even after the Covid-19 restrictions were lifted.

“We received positive feedback from customers about service attitude as well as product quality as TikiNGON has closely worked with merchants in controlling the origin, quality, and image, and our shippers to ensure the quality and safety of fresh food delivered to customers,” a representative from Tiki said.

The online service provider predicted the demand for fresh food on TikiNGON will still account for a high proportion of online grocery goods due to the pandemic’s impact even when the traditional market has reopened.

Tran Le Trang, who orders food through delivery apps three times per week, said online ordering offers various eateries with a diverse menu and reasonable prices. “It is easy for me to find a good eatery as the ordering apps provide an in-app feature that allows customers to rank and review drivers and merchants, orders, and service quality,” she said.

“These evaluations benefit me in learning more about the items before placing an order with the merchant,” she told The Hanoi Times. “I’m very satisfied and continue to use the apps.”

According to the latest report conducted by Google, Temasek and Bain & Company, increased satisfaction is the reason why local consumers are willing to spend more. 

 Reasons consumers continue using food delivery in Vietnam. Source: Google, Temasek and Bain & Company

About 65% of Vietnamese respondents said they increased usage frequency and spend on food delivery compared to pre-Covid-19. The rate is highest among other digital services such as beauty, apparel, electronics, video, music, and ride-hailing, the report noted. 

Food delivery also saw the most substantial increase in adoption and has quickly become the most penetrated service. About 41% of new digital consumers used food delivery in the Covid-19 period. Food delivery is forecast to continue to boom and is integral to everyday life, the report noted. Among Vietnam’s digital services, food delivery and transport are expected to grow by 24% to $5.7 billion by 2025.

From the merchant’s view, the owner of the eatery making sweet glutinous rice doughnuts believed her business will perform well as she has seen a surge in the number of new customers and the frequency of shopping via food apps in recent times. 

Her sentiment has coincided with the results from the report, of which nearly 90% of surveyed merchants agreed that digital platforms have brought positive benefits and opportunities for their company. In the next five years, eight in ten merchants anticipate over half of their sales will come from online sources, the report noted.