Southeast Asia’s SMEs were some of the last to adopt digital solutions as the pandemic tore through the region. Whether it was lack of access, education or just a reluctance to change, the impact on the region’s economy was felt worldwide.
This put a lot of responsibility or in this case, presented a huge opportunity for the platform players to step in to provide solutions. They were responsible for providing a digital platform for F&B, grocery and even retail to stay afloat during the peak of the lockdowns. One such platform was foodpanda.
We spoke to Chief Operating Officer at foodpanda, Pedram Assadi about their growth and the impact they are having on the SME ecosystem in the region. In fact, in August, they announced that 30,000 retailers and shops have embraced digitalisation through its shops platform.
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We wanted to understand what was the impetus behind their growth and what it means for the region, as well as take a look ahead as we slowly (but surely) move past COVID. Here’s what Pedram had to share.
Do you have a goal for the number of retailers you’re looking to onboard?
Today, we partner with more than tens of thousands of retailers across the region, and this number continues to grow. We remain focused on investing in local communities, and small homegrown businesses. In the past year, we digitalised 30,000 shops, half of which are SMEs. These range from wet markets in Thailand and Taiwan to neighbourhood grocers and bakeries in Bangladesh and Hong Kong, and mom-and-pop shops everywhere.
We help SMEs digitalise on their own terms. For instance, we work closely with many retailers providing them with a variety of digital tools to grow their business and expand their customer base. The number of SMEs on foodpanda has grown by more than 430%. Groceries, health and wellness, beauty and electronics are four core segments that have shown the most growth.
Which markets have you seen the fastest growth and why?
Operating in Asia for almost a decade, foodpanda has been a pioneer in our field all along. Since 2012, we have grown to become the largest food and grocery delivery platform in Asia (excluding China). For instance, foodpanda launched in Japan last year and today, we are already in more than 50 cities. Customers see the value of on-demand delivery beyond food, including groceries and other essentials.
Helping businesses to digitalise and stay relevant in an ever-changing world, has, in turn, helped us achieve rapid and consistent growth across all our 12 markets in Asia. According to Delivery Hero’s latest trading update, foodpanda Asia was the largest contributor with a 55% YoY increase in orders to 540 million. In Asia alone, GMV rose by more than 70% YoY, ahead of industry peers. Asia now contributes to almost half of Delivery Hero’s total revenues. It is clear that we are growing faster than ever. Across the region, we have seen basket sizes increase and a 2.5x increase in app downloads.
What are some of the challenges with foodpanda’s expansion in Southeast Asia?
While Asia is often ‘grouped’ as a region, all our 12 markets are very diverse. The way customers, riders and vendors use the foodpanda is also different, so it’s especially important for us to keep in tune with what the ecosystem in each market requires.
In addition, there is also a difference in individual market maturity and saturation. For example, Singapore and Taiwan are further ahead on the digitalisation maturity curve and have more tech-savvy customers contributing to tremendous growth rates. On the other hand, there are other countries such as Pakistan and Bangladesh that are earlier in their maturity stage for digitalisation of food delivery. However as they have a large population of more than 150 million, there is great market potential and we are doubling down our investment efforts for the long term.
In order to serve a diverse set of markets, we have harnessed a hyper-localised approach to fully empower local teams and decentralize local decisions which have proven to be a great factor in our success in Asia. Adapting to the local markets has allowed us to be closer and more relatable to our partners, customers, and riders.
As we hopefully leave behind the pandemic, do you still expect to see such quick growth?
foodpanda was growing rapidly even prior to the pandemic. Looking ahead, we expect to see a sustained surge for on-demand delivery as customers have become accustomed to the speed and convenience it provides.
While food delivery and groceries will remain the main drivers, we expect to see more non-essentials (e.g. electronics, beauty and wellness products, gifts, etc) filling up shopping carts. For example, quick-commerce has now made gifting flowers so much faster and easier. Instead of visiting a florist’s website, selecting the bouquet, and having it delivered after 1-2 days; customers can easily shop for their flowers from a variety of florists from foodpanda shops and get it delivered within 30 mins!
Thus our goal remains the same, that is to double down on speed, accessibility and variety. We are always one step ahead in serving our ecosystem through diversifying our core verticals –
- New digital tools to help our shops and restaurant partners grow (e.g. panda ads, panda box and virtual brands partnership to drive sales)
- New channels like dine-in to help restaurants bounce back (live in SG, PH and HK to help bring customers back after lockdowns)
- New rewards for loyal customers with pandapro
As such, our commitment to uplifting our community of partners and customers will remain the same in the post-pandemic era.
What’s next for foodpanda in the new year?
Next year is an important milestone for us as it marks 10 years of foodpanda in Asia. Looking at 2022 and beyond, we want to continue being an essential everyday partner to our community of riders, customers and partners. We have a DNA of continuous growth and turbocharging into the new year, we will continue to invest heavily in:
- Footprint — Food and grocery delivery should be accessible to everyone!
- In 2020 we had also crossed our 400 cities milestone
- This means not not only opening in new markets, but also providing access in more locations to reach big and small cities alike.
- Services — Help brands expand their business, whether in-country or overseas
- We are also meeting our customers’ changing needs by growing our offerings and services such as q-commerce, pick-up function, cloud kitchens, pandapro
- Expand new verticals to serve the future of digital deliveries
- We are working towards personalisation and customization in the F&B industry where menu items will be conceptualised to reach different consumer segments, even down to the individual level
- We want to optimize the customer experience and leverage it to drive more revenue for our partners.
- Expanding q-commerce
- We operate more than 250 cloud grocery stores in 11 markets
- We will continue to expand our partnerships with retailers and SMEs