Thai-tanic delivery dips: Digital food landscape to shrink by 0.6% in 2023

The digital food delivery landscape in Thailand is expected to shrink by a marginal 0.6% this year, pegging its total value at 86 billion baht according to recent projections by Kasikorn Research Center (K-Research). This change symbolises the first contraction of its rapidly blooming industry and is anticipated to coincide with an 11.3% decrease in the volume of food orders.

This decline, as per the research, can be attributed to several reasons: a changing consumer landscape in the aftermath of the pandemic, the cost of living surge, and nagging issues associated with the ordering process.

K-Research notes an 8.6% increase in the average price for each order placed this year in comparison to 2022. A survey in May by K-Research revealed that while 44% of respondents continued to use digital food delivery services, they had reduced their frequency of orders. This reduced reliance on online food delivery is due to a shift towards cooking at home or dining out, underpinned by a reluctance to bear the extra costs associated with online ordering.

A different sector of the respondents, about 42% stated their intent to maintain their current usage of these digital food delivery services. In contrast, 8% showed no interest to utilise it moving forward, while another 6% ruled out food delivery online.

Higher food prices and swollen delivery service fees were flagged by respondents as deterrents to the continued use of these online food delivery platforms. Upon probing deeper, issues such as inconsistency between food portions delivered and the amount charged, and disparities between food images on the application and the delivered item emerged.

To effectively address these chronic issues, K-Research advised online food delivery service providers to collaborate with all players in the supply chain, as this will greatly improve the customer’s overall experience. A massive 80% of the survey respondents professed usage of over one food delivery application, with a majority of them routinely switching between two applications for holistic price comparison.

A demographic breakdown revealed that the majority of users, about 58%, belonged to the Gen Y age group with Gen X following closely at 28%. These consumers expressed a desire to see these platforms diversify and meet all their daily needs within a single application.

Intense rivalry among platform providers and varied user behaviour has necessitated online food delivery service providers to devise tailored strategies such as using proprietary platform databases in collaboration with restaurant partners. This, according to K-Research, would enable them to cater to the lifestyle requirements of individual consumers.

Implementing advanced technology could also go a long way in improving user experience and targeting specific consumer groups to enhance digital food delivery in Thailand reported Bangkok Post.

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Meanwhile, Line Man Wongnai, an online food delivery platform, reported a consistent increase in food delivery orders from January 2022 to April 2023. In the Bangkok suburbs and surrounding areas, the order volume grew by 25%, and the new user base expanded by 27%. In contrast, provincial areas recorded a growth of 17% in delivery orders and a 10% increase in new user numbers.

The platform is working hard to boost recurring revenue by refining its Point-Of-Sale (POS) food restaurant total management solutions. After an agreement to acquire FoodStory, a local start-up specialising in restaurant POS systems, Line Man Wongnai is poised to elevate its merchant solutions in high-end restaurants.