The Vietnamese F&B market has a lot of room for growth in food ordering apps. According to a report, about 46 per cent of businesses have not joined the online sales channel.
According to the F&B market report in Vietnam conducted by iPOS, the size of the food delivery market in Vietnam in 2022 will reach VND 29,900 (US$1.27) billion. This number is three times higher than in 2019 when COVID-19 did not appear.
Research results on the e-commerce industry in the field of F&B also recorded that about 12.23 million people have ordered food through online platforms. The annual growth rate of the number of users reached 17.5 per cent, equivalent to 1.8 million people.
A recent report by research firm Momentum Works also announced that the total spending value (GMV) that Vietnamese people spent on food delivery last year reached US$1.1 billion. Vietnam is also one of the few markets to see growth, while most of the rest shrink in size after the pandemic.
Also Read: How I went from an Android developer to CTO of a Vietnamese e-commerce
It is forecasted that in the coming time, food delivery will continue to account for a significant part of the total sales of household businesses despite the recovery of on-site dining.
Attractive “slice of cake” for applications
By the end of 2022, Vietnam has about 338,600 restaurants/cafés and will continue the steady upward trend with a CAGR of about two per cent in the 2016-2022 period.
Through the survey of more than 2,800 F&B businesses nationwide, only 1,516 units participated in online sales, accounting for 53.5 per cent. In the opposite direction, there are still 46.5 per cent of establishments that do not participate in this sales channel.
Currently, GrabFood and ShopeeFood are the two most popular online sales applications that 29 per cent and 27.8 per cent of businesses choose, respectively. Followed by other popular food ordering apps such as Baemin (18.4 per cent), GoFood (10.5 per cent), Loship (7.7 per cent), beFood (4.4 per cent).
Other sales channels such as hotline or website are still used regularly, reaching 25.4 per cent and 14.6 per cent, respectively. On the other hand, social media channels only 2.9 per cent of establishments are interested and use.
The app lives on promotion
In fact, the trend of using technology applications for food and beverage activities is one of many worries of F&B businesses in the new normal. Besides capital, human resources or operations, changes in customer behaviour always have a great impact on the revenue of the business.
This signal shows that restaurants and eateries have recognised users’ online food ordering habits. To create more revenue, restaurants and eateries must also consider the plan to expand their online sales channels. Not only generating more cash flow but partnering with apps is also a branding solution.
Through a user survey, iPOS said that ShopeeFood is leading the user market share with 58 per cent, followed by GrabFood (48 per cent), Baemin (36 per cent), and Gojek (24 per cent). Meanwhile, Loship and beFood have the same rate of seven per cent. Notably, only 13 per cent of the respondents did not use any food delivery apps.
Over the past few years, the food delivery app market has gradually stabilised after going through a tumultuous start-up period. Up to now, this playground mainly belongs to the applications behind foreign enterprises such as ShopeeFood (Sea Limited), GrabFood (Grab), Baemin (Woowa Brothers), GoFood (Gojek) and some domestic brands such as beFood (be) or Loship.
However, the habit of using the application of users is still “nourished” by discount codes. About 48.5 per cent of respondents decide to order food on an app because of a discount code, while 65.3 per cent consider choosing an app through a promotion policy.
Also Read: The realities of scaling food tech in today’s resource-strapped world
Users also prioritise restaurants with close proximity, palatable dishes/drinks, and based on previous reviews. In addition, some other factors, such as the restaurant’s free delivery, are also interesting to 44 per cent of the respondents.
Even though the F&B market may have challenges, it will continue to grow
Although the economy in 2023 is forecasted to be difficult, most consumers want to spend a lot of money on food. This is an opportunity and potential for both F&B businesses and food ordering applications.
Specifically, 46.27 per cent of consumers expect to stay the same and 30.89 per cent to increase their spending on food and drinks. The rest intend to reduce consumption.
However, Mr. Do Duy Thanh – Director of F&B at Horeca Business School – said that the trend of online sales will develop but only in the short term. Online food delivery applications have passed the time of burning money and will increase the cost of high discounts in the near future to make up for the initial investment budget. Algorithms show on apps, and it’s harder to make room for quality ads or restaurants.
—
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image credit: Canva Pro
This article was first published on June 5, 2023
The post The ‘gold mine’ of food ordering apps in Vietnam appeared first on e27.