Food in Asia used to be simple. You grew it, you ate street-side from a pushcart vendor, or you bought it from the market, and brought it home. Maybe on a special occasion, you’d go to a restaurant and pick something special from the menu. Easy.
Life is getting complicated in what’s now a huge business. Food is very much an industry, and estimated to be worth US$12.24 trillion by 2020, according to Grand View Research.
Take a closer look, and you’ll see that Asia’s food culture, along with its complex ecosystem of farmers, manufacturers, distributors, grocers, and restaurateurs, is in the midst of a paradigm shift. The change is driven by modern, time-strapped, and impatient consumers. The rich street-food culture is still there and just as vibrant as ever. But new tech is changing tastes, attitudes, and lifestyles surrounding food.
Swapping traffic for home tabletops
Nowhere is that dynamic more evident than in the boom of online food delivery. The trend is led by the rise of app-based delivery platforms such as Foodpanda, GrabFood and Go-Jek. In fact, food delivery is so popular in the Asia Pacific region that research by Euromonitor shows food delivery sales were twice the size of those in North America at last count.
These platforms are filling the growing demand for convenience among Asian diners. Asian urban professionals often aren’t keen on cooking but also don’t want to be bothered to leave their homes to dine out. For customers in congested countries like Thailand, the Philippines and China, food delivery is a smarter, not to mention cheaper, alternative to braving the snarl of traffic jams. It’s a case of the free market providing a solution to a problem the government has yet to solve.
Food delivery also expands the variety and range of cuisine options available to diners. Asian travellers are beginning to dominate international tourism, and are bringing those tastes back home. Doorstep delivery gives them access to good food in the comfort and privacy of their homes, perhaps in styles or from cultures that they can’t match in the kitchen.
New manners and business models
The democratization of online food delivery services also presents new opportunities for workers. In large cities like Bangkok, Jakarta, Manila and Shanghai, moonlighting as a food-delivery jockey is good work.
According to a South China Morning Post report, Chinese food-delivery riders can earn 7 yuan (US$1) in commission for every order delivered on time. Multiply that by a thousand orders in a month and you could be looking at earning 10,000 yuan (US$1,450), on top of the basic salary offered by some food-delivery platforms. For restaurants and operators, these platforms have opened up new sources of revenue and new ways to build their consumer base.
One of the hottest trends in Asia’s foodservice industry is the cloud kitchen. These are dining establishments that operate through shared kitchens and exclusively serve takeout and delivery orders. Given the high operating costs, labour demands, and failure rates of sit-down restaurants, this takeout-only business model, used by companies like Dahmakan and Grain in Singapore, has become a cost-effective and competitive option thanks to the boom in food delivery.
Grocery stores are combining brick-and-mortar locations with convenient delivery. In China, you can point out the fish you’d like in the tank, pick the sauce online, and have it delivered steamed to your tastes to your door. Or select what you’d like to cook for the evening online, then pick it up at the grocery while you pick out in person the spices you’ll need that night. Research from IGD suggests that online grocery sales in Asia’s top-12 markets will ramp up from US$91 billion now to US$267 billion in 2022.
Eating the information up
The digitalization of restaurant communications and marketing is also changing how customers discover and interact with restaurants and food brands. In Southeast Asia, 61% of people are on social media, far higher than the global average of 45%. Consumers are taking to Facebook, Instagram and Twitter to look for dining recommendations and explore their food options.
Aside from online food delivery, digitalization has also paved the way for digital order taking and expanded payment options such as e-wallets. The digitalization of these mechanisms also means that data is fast becoming the most-important currency for restaurant operators and other food and beverage businesses. Big Data provides food businesses with valuable insights on everything from how much consumers spend, what they typically put in their basket, how fast and effectively the deliveries reach their destination, and even how satisfied customers end up. For example, GrabFood Merchant Partners provides establishments with a collection of tools to help them track, analyze, and improve on the performance of their food business.
What’s the next order of business?
Perhaps what’s most interesting about the innovations in Asia’s food industry is how it is growing organically through a confluence of factors. These include high mobile-usage rates, customers who are social-media savvy, and a desire for convenient dining.
These factors, in turn, are helping create new business for restaurants. For example, easier access to home delivery means consumers are ordering takeout more often. The cloud-kitchen phenomenon, robot-served restaurants, and new trends in gastronomy mean food and beverage operators have more business channels than ever before. Governments would be well-advised to support this trend by helping to provide the infrastructure that will allow these enterprises to flourish in Asia.
In any case, what’s clear is that both foodservice operators and consumers in Asia are living in exciting times. Business owners are leveraging technology to increase their consumer base and analyse consumption data to ensure that they serve the tastes of their consumers. Consumers for their part have an incredible array of food options right at their fingertips.