Thailand
Thailand: Deliveries to see bright last quarter
The online food delivery segment is expected to be robust in the final quarter, driven by the platforms’ participation in the government’s Khon La Khrueng (half-half) co-payment scheme.
The third phase of the co-payment scheme has expanded to cover food delivery platforms. People can use their services linked with the scheme from Oct 4.
Alejandro Osorio, country head of Grab Thailand, said the participation of Grab in the scheme will help encourage consumer spending and stimulate the overall economy, especially for those merchant partners who were impacted by the lockdown.
“We hope that this co-payment scheme will help boost sales for restaurants, as well as boosting consumer spending even more for last quarter,” he said.
The pandemic has changed consumer behaviour in many ways while many small and medium restaurants have joined delivery platforms.
“We saw more merchant partners join GrabFood, with over 200,000 merchant partners which resulted in more transactions on the platform,” Mr Osorio said.
He said Grab saw higher food delivery adoption in non-central business district areas and second-tier cities across Thailand in the second half of this year.
Early this month, Grab announced the ‘GrabFood Land of Food’ campaign to help boost sales for merchant partners, including a ’50-50 co-payment’ programme, which will see the commission fee collected from merchant partners joining the project not over 20%.
Grab also offers discounts up to 60% for over 20,000 deals from participating merchants.
Yod Chinsupakul, chief executive of Line Man Wongnai, which provides the Line Man food delivery service, said he is aware of cautious household spending as a result of economic volatility.
However, social distancing has driven demand for food delivery services amid the third wave of the pandemic which saw a 300% uptick in usage.
The government’s co-payment campaign which includes food delivery platforms will also drive online ordering, he said.
In the second half, the company saw more frequent orders with higher prices from the level seen in the first half, particularly during special occasions, such as Mother’s Day.
An increase in orders is also seen in suburban areas as well as second-tier and third-tier provinces.
Online food ordering can serve new normal behaviour despite the easing of the lockdown.
“We see the co-payment scheme will help us tap into 30 million users who may apply and become first-time users,” said Mr Yod.
Line Man has expanded its services across the country with free delivery over the first five kilometres from partners. The company also injected 20 million baht for discount codes.
Kasikorn Research Center (K-Research) indicated the restaurant sector is expected to face a loss of more than 60 billion baht in revenue this year due to the government’s restrictions, which drove food delivery as a main revenue source for them.
The number of food delivery orders is expected to reach 120 million this year, three times that of 2019.
The food delivery market is expected to surge 18.4-24.4% to 53-55 billion baht in value this year, K-Research indicated.
Under phase 3 of the scheme, the government pays for half of food, drink and general goods purchases of up to 150 baht per person per day, capped at 3,000 baht per person.
This subsidy programme expires in December.
Source: https://www.bangkokpost.com/business/2188567/deliveries-to-see-bright-last-quarter