Food delivery apps Grab and Foodpanda expand into dine-in services as explosive growth stalls

SINGAPORE — Singapore-based nutrient transportation apps Grab and Foodpanda are expanding into the dine-in space, arsenic consumers look to devour retired much post-pandemic.

Grab is testing its dine-in feature crossed 15 cities successful Singapore, Thailand and Indonesia, allowing users to pre-purchase dine-in vouchers astatine up to 50% discounts. App users tin also view restaurants' menus and reviews, bid and wage via a QR-based system, arsenic good arsenic publication rides to restaurants.

The institution told CNBC it has plans to motorboat successful Malaysia, the Philippines and Vietnam arsenic well.

Foodpanda was the archetypal nutrient transportation companies successful Singapore to present dine-in features successful 2021.

Foodpanda Dine-in is presently disposable successful Singapore, Thailand, the Philippines, Malaysia, Hong Kong, Pakistan and Bangladesh. Since 2022, implicit 8,000 restaurants crossed these countries person started offering dine-in discounts ranging from 15% to 25%.

"We triggered the treatment already during the pandemic. And of course, we knew backmost past already, that determination volition beryllium beingness aft [the pandemic]," said Jakob Sebastian Angele, Asia Pacific CEO astatine Foodpanda, astatine a media briefing past week.

Angele said the institution sees "a immense imaginable successful dine-in" and it tin go "very, precise sizable" for Foodpanda. Food transportation is presently inactive Foodpanda's largest business, followed by market delivery, helium said.

Last week, Foodpanda announced a collaboration with Singapore-based edifice solutions supplier TabSquare to automate nutrient ordering processes done integer menus, QR ordering and more. TabSquare was afloat acquired by Foodpanda's genitor institution Delivery Hero successful 2021.

In June, nutrient transportation service AirAsia Food launched dine-in services successful collaboration with edifice preservation level eatigo. In Thailand, it adjacent offers a queuing work which allows users to publication riders to queue up for them astatine restaurants.

Tay Chuen Jein, caput of deliveries for Singapore astatine Grab, said astatine the clip erstwhile the steadfast launched GrabFood's Dine-in work that offering these discounts "makes eating retired much affordable."

"It not lone helps our users observe restaurants to spell to, but besides makes eating retired much affordable arsenic respective merchant-partners are offering charismatic dine-in vouchers that tin beryllium purchased done the app," Tay said successful a property release.

Jonathan Woo, a elder expert astatine Phillip Securities Research, said that with eating retired costs expanding with higher inflation, "consumers are besides looking for deals to prevention costs wherever they can, and there's astir nary amended feeling than having a bully repast astatine a discount."

He said Grab tin "indirectly make incremental gross from dine-in services." In this instance, revenues are derived from committee fees for each dine-in voucher purchase.

"Increasing monetization from existing users is importantly much outgo effective, portion besides raising consciousness for F&B merchants," said Woo.

Investment banking steadfast Benchmark Company said successful an April study that nutrient transportation experienced stellar maturation successful the past 3 years.

But the study added that a 50% compound yearly maturation complaint "has been showing signs of moderating maturation lately arsenic consumers resume their mean regular routines and spell retired and dine successful much frequently."

"With reduced incentives arsenic precocious maturation companies prioritize currency preservation, we expect that consumers whitethorn bid little frequently, and merchants volition apt displacement their efforts towards dine-in, which could further dilatory on-demand bid measurement maturation adjacent term," said the analysts astatine Benchmark Company.

Benchmark added that it expected "normalized nutrient transportation maturation going guardant with a CAGR of 13% done 2025." CAGR is simply a measurement of annualized returns for an concern implicit a play of time, with the presumption that profits are reinvested astatine the extremity of each year.

Grab's CFO Peter Oey said during the firm's first-quarter net telephone successful May that the institution expects deliveries to retrieve successful the 2nd quarter. Deliveries gross merchandize measurement successful the archetypal 4th was astir 9% little than a twelvemonth ago.

"Notably, deliveries transactions person rebound powerfully successful the backmost extremity of April, pursuing the Ramadan fasting period, and this has been sustained into the aboriginal parts of the period of May," said Oey.

Chinese tech giants specified arsenic Alibaba and ByteDance provide so-called section beingness services, including nutrient delivery, in-store dining, question booking and radical buying. Chinese nutrient transportation elephantine Meituan offers in-store eating services which see dine-in vouchers.

Sachin Mittal, caput of telecom, media and net assemblage probe astatine DBS Bank, told CNBC this was a "standard template which everyone does."

"Food transportation apps privation to assistance [restaurants] get immoderate concern successful presumption of eating successful and booking. So I deliberation it's a precise earthy happening to do," said Mittal.

"Whether it's due to the fact that of Covid oregon not, it has to beryllium done similar this due to the fact that there's nary transportation charges progressive successful this truthful this increases the [profit] margin," said Mittal.