In 2020, a year marked by pandemic-induced lockdowns and movement control orders, “eating in” became the new dining out in Southeast Asia. In turn, the food delivery sector got a shot in the arm.
As customers continue to satisfy their hunger pangs by taking to food delivery apps, Gross Merchandise Value (GMV) in the sector is expected to touch $15.5 billion this year, up at least 30% YoY. Indonesia will account for half of the GMV.
Investors seem to have foreseen the boom. Last year, food delivery startups — restaurant tech firms and cloud kitchens included — raised at least $2.75 billion from 17 deals, according to DealStreetAsia’s latest report Food Delivery Platforms: SE Asia’s Race to Deliver. This was a third of the total $8.6 billion raised by SE Asia’s startups in 2020.
However, the overall deal value was skewed by Gojek’s three deals that raised a combined $1.65 billion and Grab’s two deals that raised $1.06 billion.
Excluding Grab and Gojek, startups in the sector raised at least $41.5 million. Malaysia’s dahmakan and Indonesia’s Yummy Corp were among the rising stars here.
In terms of deal volume, in 2020, there were seven deals in Indonesia, four in Singapore, three in Vietnam, and one each in the Philippines, Cambodia, and Malaysia.
In Q1 2021, there were six deals that raised a combined $2.004 billion, including Grab’s $2 billion debt facility. Other fundraisers in the quarter included OrderEZ, and Easy Eats of Singapore.
Seeing the strong growth in the sector, players whose core businesses were hit by the pandemic decided to pivot it. For instance, AirAsia launched food deliveries in Singapore and Malaysia, while travel tech firm Traveloka launched its food delivery service in Indonesia.
Low penetration rates in Southeast Asia and COVID-induced behavioural changes in consumers are the big draw for these new players, despite the presence of formidable rivals in the sector.
Superapps sharpen their delivery focus
Meanwhile, superapps like Grab and Gojek are doubling down on their food delivery and groceries vertical as COVID-19 has hit their mainstay ride-hailing business. In a recent investor presentation, Grab projected that its delivery segment (where the bulk is food delivery) will grow from $5.5 billion in 2020 to $7.5 billion this year.
Delivery partners, too, were readily available in the region. During the pandemic, motorcyclists easily pivoted to food delivery for income as lockdowns led to a plunge in ride-hailing businesses. Superapps are also targeting Vietnam and Indonesia, which have the highest ownership of motorcycles or scooters per household in the region, 2015 data from Statista show. Hence, onboarding delivery drivers is deemed to be easiest in these markets.
Other highlights of this report, available exclusively to DealStreetAsia – Research & Analytics subscribers, include:
- Complete list of food delivery sector deals in 2020 and Q1 2021 in SE Asia.
- Understand the unique macro factors — labour productivity, motorcycle ownership, per capita GDP etc., — aiding food delivery in the region.
- What are the regulators doing to govern and oversee the sector in each country?
- A discussion of the sector in each of the major SE Asian markets.
- How will superapps append the sector? Will new entrants stand a chance with their palatable offers?
If you are premium news subscriber, upgrade your subscription to include DealStreetAsia’s Research and Analytics to access our entire set of reports, data-led stories and deal monitors. Our R&A subscribers will also get access to our upcoming database of company financials and cap tables based on ACRA filings. Still not sure? Opt for a one-month trial for our R&A offerings for $299.