Restaurants that were once dine in-only are now rushing to sign up for delivery. Grab says new merchant applications have tripled. LINE MAN claims the number of restaurants applying to join its platform rose by 5X. Neither company provided raw numbers.
What’s Happened So Far with Precautions And What’s Being Done?
Thailand’s food delivery companies are enjoying their moment in the sun, but it remains unclear whether this sudden boom can help make their businesses sustainable. Discounts, promotions and free-delivery codes have been standard in recent weeks, indicating that platforms are burning more money than ever to gain new users and restaurants.
And it’s not like delivery can save Thailand’s restaurant industry.
Kasikorn Research Center—K-Research, a division of Thailand’s Kasikorn Bank—downgraded its 2020 revenue forecast for restaurants in the country by nearly 10% to 402-412 billion baht (US$12-12.7 billion). The food delivery industry, though, is projected to gross 38.61 billion baht (US$1.19 billion). That’s barely 10% of the restaurant industry and leaves a significant shortfall for eateries, even without accounting for platform operators’ revenue share.
Then there’s the very real possibility of a thorough lockdown, in which case systems will further collapse. Thailand’s Deputy Prime Minister Wissanu Krua-ngam has said publicly that it’s a possibility. Would that mean a whole new order?
Foodpanda, others in a fast food rush
Unlike neighbours Singapore, Malaysia and the Philippines, Thailand’s response to the Covid-19 outbreak has been gradual with no strict lockdown. However, that changed for restaurants with the 21 March order.
“We saw the impact the next day with new users in Bangkok and the surrounding areas seeing heavy uplift,” Felde says.
Bangkok’s outdoor advertising industry is a major beneficiary of Thailand’s four-way food fight, with the city’s billboards decorated with promotions and discounts for each company. Adding new users is the easy bit for food delivery apps—far harder, however, is managing this new demand from restaurants.
A LINE MAN driver giving a ride to a Lalamove driver is looked over by a GET advert [Image: Jon Russell/The Ken]
Foodpanda onboards restaurants through a field-based team that visits each establishment. It also draws up a contract, supplies point-of-sale tablets and trains merchants on the tech and processes. Those methods have had to adapt to the Covid-period, with online verification taking over.
Still, Felde says the process tops out at verifying 3,000 new restaurants per week—although last week, Foodpanda managed 2,000—which would leave as many as 7,000 applicants unmet. The Foodpanda Thailand CEO admits that “there will be a backlash” from restaurants forced to wait due to the process. Foodpanda claims to work with 50,000 restaurants.
In an emailed response, Tarin Thaniyavarn—country head of Grab Thailand—said GrabFood is working to reduce restaurant onboarding to 7-10 days from a usual 14-21 days. GET, too, is reducing its process from what was typically one month prior to the Covid-19 outbreak to one week, CEO Pinya Nittayakasetwat told The Ken.
LINE MAN has taken a contrarian approach with a focus on self-service. It has synchronised its listings with Wongnai—a popular restaurant finding service—so that new restaurant listings on Wongnai are fast-tracked to the LINE MAN platform.