The online food delivery market is growing at an explosive pace in Southeast Asia. Rapidly increasing disposable income, a growing population of tech-savvy millennials, and a convenience-driven consumer lifestyle are the major factors influencing the rise of the restaurant delivery or online food delivery industry in the region.
According to a report by Google, Southeast Asia’s food delivery market was worth US$5.2 billion in 2019, more than double its value the previous year. The overall food market in Southeast Asia is forecast to surpass US$20 billion by 2025, representing a growth of 50 times in a decade, according to the report.
Having said that, it is also a hyper-competitive landscape, as a number of food delivery start-ups have mushroomed in the region. Grab, Foodpanda, Street Panda, GoJek, and Deliveroo are some of the biggest food delivery players in Southeast Asia, constantly battling to climb up the ladder.
Successful last-mile delivery is the true litmus test of a food delivery business. It is the last step in the supply chain where a restaurant interacts with the customer. If the delivery goes even slightly wrong, it might upset a valued customer and hamper the company’s brand image.
The food delivery supply chain is typically hyperlocal in nature and highly time-sensitive. A restaurant’s delivery supply chain is generally short-lived, say somewhere between 30 minutes to an hour; from the point of placing an order till the point it reaches the customer’s doorstep.
In this short span of time, a number of factors come into play. The food needs to be prepped, packaged, and handed over to a delivery executive. It has to then travel to the customer’s location in the most ideal condition and delivered well within the ETA.
However food delivery is no cakewalk. A lot could go wrong in this short span of time. There could be a delay in assigning orders to delivery partners, traffic congestions, and other real-world constraints that could impact the last-mile delivery.
Setbacks faced by Restaurant / food delivery companies in Southeast Asia
- Peak Period Delivery Volumes
- Maintaining Food Quality and Safety
- Management of Resources
- Logistical Challenges
Peak Period Delivery Volumes
The restaurant delivery supply chain in Southeast Asia is defined by a set demand pattern, called the weekend effect. The order volumes typically go up starting from Thursday, reaching a peak on Sunday; followed by a massive drop in orders in the early days of the week.
Ever since lockdowns have been imposed all over due to the COVID-19 pandemic, food delivery orders have shot up dramatically. Restaurants often fail to cope with such heavy volumes of orders pouring in, and end up disappointing the customer.
Maintaining Food Quality and Safety
Travel often makes ice-creams melt and french fries soggy. Not every dish travels as good as it tastes in a restaurant, which is why a huge risk that lies in the restaurant food delivery business is maintaining the ideal quality of the food during its transit.
Another common challenge is ensuring that the food is not tampered with by delivery executives. In today’s tough times, it is also absolutely important to ensure that the food is prepared and delivered with utmost hygiene standards such as zero-touch delivery practices.
Management of Resources
The food delivery supply chain runs on dynamic demands, which need to be fulfilled within a very crunched time-frame. Inadequate on-ground resources and incompetence in managing resources efficiently is a major cause of concern for food delivery enterprises.
More so during the pandemic where the manpower is lesser than ever before. At the same time, allocating tasks and utilizing vehicles effectively is difficult with human intelligence alone.
Restaurant Logistical Challenges
Food delivery is all about speed and freshness. Traditional logistics systems are incapable of planning delivery routes smartly, arriving at accurate ETAs, and considering real-time constraints such as traffic, demographics, and distance from restaurants to customer locations.
Lack of supply chain visibility also makes it difficult to monitor on-ground delivery operations and raise red flags in case of emergencies. In Southeast Asia, it is even more difficult to ensure timely delivery of food packages, given complex geographies and slow adoption of tech in logistics.
Restaurant Delivery Optimization Software: Solving Food Delivery Challenges
Technology is now disrupting the food delivery industry in Southeast Asia enabling express deliveries cost-effectively.
Automated Route Optimization solutions help in planning on-demand delivery routes optimally with minimal fuel consumption, taking into account real-time traffic congestions. Routing software also calculates Expected Time of Arrival (ETA) accurately, allowing food delivery companies to keep communication transparent with customers.
Advanced restaurant delivery optimization solutions offer features such as smart task allocation, based on rider preferences and tribal knowledge of delivery agents. With the power of Machine Learning and analytics, companies can predict the estimated peak period order volumes based on historical data and plan last-mile operations more effectively. Live monitoring tools can help logistics managers keep track of on-ground operations and get instant alerts and notifications in case of delays.
Good food within minutes is every hungry customer’s biggest demand, and ultimately, enterprises that can satisfy the customer the best can survive the fierce competition in the food delivery market. Efficient logistics is the key to optimizing the food delivery supply chain, ensuring safer and faster last-mile fulfillment, and thereby better customer satisfaction.