Thailand: Food deliveries set to decline next year
The value of Thailand’s food delivery market is expected to decline by between 0.8% and 6.5% next year as people return to a normal lifestyle and eat out more, says Kasikorn Research Center (K-Research).
The market value is expected to total 81-86 billion baht in 2023, but this still exceeds pre-pandemic levels, partly driven by the use of apps to order food, marketing campaigns, and an increase in payment per order, the research house said.
“As life returns to normalcy, food delivery is slowing in line with Covid-19 infections,” K-Research said in a report.
Other countries are also experiencing a slowdown in the food delivery segment as people return to normal life following improvements in the pandemic situation, said the report.
A recent survey by K-Research found 37% of respondents said they use fewer food delivery services since the beginning of this year.
Some 27% said their usage remained the same, 31% said they used the service more, while 5% did not use the service at all.
The survey showed people used food delivery services five times a month on average, down from seven during the pandemic.
The usage frequency is expected to stabilise or even decline in the future, K-Research said.
Noodles, Thai food, Isan food and made-to-order meals are expected to remain popular among users as there are a wide variety of dishes with inexpensive prices.
A slowdown in sales of drinks and bakery items can be expected as people can buy them commuting to work, predicted K-Research.
The average payment per order is expected to grow as ingredients and energy costs remain high, said the paper.
K-Research said food delivery platforms need to expand services to the provinces, offer monthly packages, and grow their business reach to groceries in order to maintain revenue, as the food ordering segment is approaching maturity.
The industry has been hit with high costs and losses, although the platforms saw their revenue increase 5-6 times between 2021-2022.
In the future, K-Research said platforms need to leverage artificial intelligence technology to usher in fine-tuned promotions for targeted customers and reach out to more groups, such as the elderly and sick people. They can also seek more revenue from their existing customer base through loyalty programmes.
The research house said it is vital to improve supply chain management through back-end systems to cut wait times for drivers and effectively handle various orders at once. K-Research recommended food vendors that rely heavily on delivery platforms to explore new sales channels to reach out to more customer groups.