Asian Restaurants and Shops with Possibly the Best Food in Town – Travel to These 3 Cities!

Gojek offered on-demand food delivery alongside personal transportation on motorcycle taxis. This multi-service fleet proved so effective in Indonesia that its rival Grab also adopted the model later. It’s less of an advantage in cities that don’t have motorcycle taxis. But in Indonesia, where this mode of transportation is common, it allowed delivery platforms to expand fast and keep delivery costs low, former Foodpanda employees told us.

Foodpanda had a second disadvantage to Grab and Gojek. It didn’t adapt to local cashless payments trends. The company, even now, only accepts cash payments, credit cards, and PayPal. The latter two options aren’t that common in Southeast Asia.

Dining Places in Bangkok

Meanwhile, Grab and Gojek both launched versatile integrated mobile wallets that made it easy for customers to pay for services such as rides and food in a smooth, seamless experience. Gojek launched its wallet GoPay in Indonesia in 2016. Grab kickstarted GrabPay the same year, although it took the firm a while to adapt the wallet to different countries. In Indonesia, Grab chose to partner with Ovo, a local mobile wallet in 2018.

That Foodpanda is shifting its R&D centre to Singapore, with plans to hire 500 IT and product people, is a significant change in tune, signalling a commitment to improve on localisation this time around. It wants to develop its own mobile wallet, another former employee said, one that will also allow users to spend Foodpanda credit at hawker stalls and food courts. But its efforts with the wallet come late and will “hardly be a game-changer” for the firm, a former employee said.

As of now, there’s little consensus on the number of Southeast Asian countries in which Foodpanda commands a clear market leadership position. By some accounts, Foodpanda leads only in Malaysia and the Philippines, falling behind Grab or third players in other markets. In other industry insiders’ assessments, Foodpanda leads in Thailand and Singapore.

The companies themselves each highlight different strengths. Gojek claims leadership by numbers of orders, Grab by GMV, and Foodpanda by how quick the delivery is.

New battlefronts

New battlefronts

Grab and Gojek’s financials haven’t been made public, but both firms have suggested that food delivery is among the best-performing business units in their multi-service offering.

Grab said food and financial services now make up over 50% of its GMV. However, achieving operational profitability is easier said than done especially in price-sensitive markets like those in emerging Southeast Asia.

Presently, customer acquisition costs still outweigh income opportunities. “Promotions trigger consumers to order food online as of now,” Mevira Munindra, the head of operations at market intelligence firm IDC Indonesia told us. That they’ll stick around after promotions end is not guaranteed.

The three-way competition flaring up between Grab, Gojek, and Foodpanda across many markets in the region has the potential to trap all players in another few years of expensive customer acquisition.

Grab and Gojek have the advantage of being able to keep logistics costs low with their vast delivery fleets, and they have cashless payments systems with high adoption rates. But operating multiple services at once also comes with risks, as any of these business units may soak up resources and attention.