The food sector has gone through a significant evolution over the years, with the emergence of online food delivery services being the most recent. While the figures might differ in various locations, online food delivery rates are expected to grow to more than $220 billion by 2025. In South East Asia (SEA) alone, food delivery platforms’ gross merchandise value (GMV) has seen immense growth, mainly driven by markets like the Philippines.
As online food and grocery delivery has become common amongst consumers, q-commerce platforms have also taken the interest of consumers looking for same-day, matter-of-minute delivery of their daily essentials.
One of the most prominent and influential tech companies leading the charge in this emerging industry is foodpanda, which has been providing food and delivery services to Filipino consumers for the past eight years. At the forefront of this fast-growing quick commerce digital platform is their Chief Executive Officer (CEO), Daniel Marogy.
Before joining foodpanda in early 2020, Dan was with 7-Eleven for several years and served as Managing Director of CLiQQ, the company’s digital venture. With years of experience in the tech and e-commerce space, he witnessed the digital transformation of the Philippine market, which helped him understand consumer demands much better.
“Over the years, we have witnessed a remarkable evolution in consumer habits here in the Philippines, with the apparent emergence of a vibrant digital ecosystem,” said Marogy. “The pandemic clearly accelerated digital adoption, but relative to other markets in APAC and beyond, we see there is so much more to come.”
The rise of online shopping and delivery platforms
Even before the pandemic, the Philippines’ digital transformation was already well underway, with online shopping slowly integrating itself into the consumer buying process. However, when the pandemic happened, and lockdowns were enforced, people were even more compelled to shift to digital platforms for their basic necessities – from paying bills to ordering food. The country’s digitalization suddenly went into hyperdrive overnight.
“At foodpanda, we also saw a rapid growth in consumers shifting to digital quick-commerce platforms for the speed and convenience they offer. Traditional brick-and-mortar businesses such as restaurants and groceries started going digital as a way to keep serving–and retaining–their customers while their stores remained closed,” Marogy shared.
Old trends combined with new demands
Now that it has been months since restaurants finally opened for dine-in customers, foot traffic has increased again. On the other hand, Marogy expects that the trend of take-out and delivery options will stay even in the post-pandemic world.
“We know this first-hand, as even though the loosened restrictions are tempering our once hyper-driven numbers, the demand for both food and groceries delivery remains on a growth trajectory.
Marogy also revealed that the demands of foodpanda’s app users in 2022 also showed an increased preference for dine-in and pick-up services. “With dine-in and pick-up, even when consumers are finally going out, foodpanda can still be their partner as we offer them new and improved ways to enjoy food and satisfy their cravings.”
“The transition from long periods of lockdowns to more relaxed restrictions had a marked impact on the consumer trends and behavior in 2022 where we saw a mixture of usage between online and offline services.”
Marriage of online and offline
Marogy postulated that as we move further into the post-lockdown world, we will simultaneously see more of both worlds – offline and online- in action.
“Digital will be an additional channel and will never replace brick-and-mortar businesses. There are just too many consumer tastes and preferences for any single channel to accommodate, and as a consequence offline and online players should look to form close partnerships and leverage the other’s strengths.”
For their part, foodpanda continues to change the game in the new normal world by merging online and offline commerce and redefining their relationship from competition to close collaboration.
“We have been supporting our partner vendors’ physical and digital business streams so we can capture both of these markets. For restaurants forced to abandon brick-and-mortar stores and start-up brands with small capital, we offer unique support via our shared kitchens that allow them to operate in the same physical space, share resources, and maximize efficiencies.
As per Marogy, these initiatives aim to connect both the physical and digital worlds effectively. We’ve seen it in other e-commerce and quick-commerce markets in developed countries across the globe, and we are proud to lead the charge here.
What to expect for the future of food
“I firmly believe the future of commerce is a hybrid of online and offline, and the collaboration between digital and non-digital players is the key to bringing out the best in both worlds. Retailers should do retail, restaurants should serve food and beverages, and tech companies should do tech. Through partnerships anchored on multiple players specializing in the areas where they have experience and advantages, we can jointly provide customers with limitless options on how they want to consume—whether at the store, in the comfort of their homes or some mix of the two.”
According to foodpanda PH chief, their company aims to become an even more trusted and go-to platform that will cater to the different food-related needs of customers.
In a market like the Philippines, we believe the most significant and most attractive segment in the digital space is food, where an outsized proportion of consumer spending is focused compared with more developed, high-income markets. For foodpanda, we are dedicated to digitizing the food space in the Philippines and will be committing all our energies toward realizing that goal. “This will be our north star while ensuring that our community of other stakeholders like partner vendors and delivery partners, are all satisfied and happy.”