Will he join the food industry here? – Health Guild News

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In early April this year, Singapore-based e-commerce giant Shopee made its foray into food delivery with the launch of its new vertical, ShopeeFood.

Shopee had first posted a recruitment post on social media, before officially launching it with a 30-second introductory video.

ShopeeFood Video / Video Presentation Credit: Shopee Indonesia

In accordance with Compass, Shopee is the first e-commerce platform to have its own food delivery service in Indonesia, with local players GrabFood and Gojek’s GoFood.

Recently, in June, ShopeeFood Indonesia also announced that it was expanding to cover more cities in an Instagram post. The service is now also available in Bandung, Jogja, Surabaya and the surrounding area.

The same month, Shopee adopted the same strategy for its Malaysian market. He posted a post on his Facebook page looking for “ShopeeFood Delivery Partners in Kuala Lumpur and Selangor,” along with a list of requirements.

This movement indicates its expansion into Malaysia. With this new company, ShopeeFood joins the food delivery scene with established local competitors such as GrabFood, Lalamove, foodpanda and even airasia.

Since ShopeeFood is making its way to Indonesia and now Malaysia, it is natural to question whether it will also launch in its home country: Will Singapore be ShopeeFood’s next expansion move?

He is not a novice in food delivery

Food delivery is not really a new space for Sea Group, Shopee’s parent company acquired a 82% stake in Vietnam Foody Corporation, which works with Now.vn, for $ 64 million in 2017.

According to a 2020 report by consulting firm Momentum Works, the sea-owned food delivery service now quietly dominates the Vietnam market.

SEA GMV Food Delivery in 2020 / Image Credit: Momentum Works

It now generates 42 percent of the gross commodity value (GMV) of food delivery in Vietnam, while Grab follows close to 40 percent.

Momentum Works also reported it food delivery grew by 183% in 2020, and consumption will continue to grow in the coming years.

In July last year, ShopeePay partnered with the AtozGo short-distance food delivery service, which is only available in certain office buildings, residential areas and shopping malls in Jakarta. This meant ShopeePay’s entry into the grocery and last-mile food space.

Shopee’s entry into the food may also be an attempt to increase their payment service. Simply put, more orders on the delivery platform translate into more ShopeePay transactions.

Almost all the major technology agents in Southeast Asia are pushing towards financial services due to market opportunities and margins. Payments are usually the starting point as companies build their financial products and services.

How does ShopeeFood work in Indonesia?

According to the previous Momentum Works report, Indonesia had the largest food delivery services market in terms of GMV in Southeast Asia by 2020.

Jakarta has a high consumption power, a concentrated population and a high Internet penetration rate; all of these are favorable factors that make it an access point for food delivery and transportation services.

shopeefood
Image credit: ShopeeFood Indonesia

According to a recent one CLSA research report, 69% of Indonesians order food delivery at least once a week, and 11% do so almost every day.

An independent survey conducted by Rakuten Insight revealed that approximately 26% of respondents aged 55 or over ordered food at food delivery applications once or twice a week in Indonesia.

In addition, eight percent of respondents between the ages of 16 and 24 ordered several times a day.

Along with the fact that Shopee has more than 40 million monthly active users in the country, the odds could be in favor of the e-commerce platform.

While GrabFood and GoFood have dominated the Indonesian food delivery market, the country is definitely big enough to offer Shopee a good chance to catch a good chunk of the food cake.

In Indonesia, ShopeeFood catches sellers by promoting its 80 million user base and promises to subsidize a hefty discount.

According to the local publication, in October 2020, ShopeeFood has incorporated more than 500 F&B traders into Indonesia Katadata.co.id.

Meanwhile, the ShopeeFood driver application has been installed more than 500,000 times as it became available on the Google Play Store. It is currently unclear whether Shopee plans to launch a standalone app for the food delivery service.

From groceries to food

Food delivery giants like GrabFood, Deliveroo, and foodpanda have one thing in common: they offer food delivery first before finally venturing out with food delivery.

Grab offers GrabMart, while foodpanda offers PandaMart.

In October last year, Deliveroo also launched its first on-demand grocery delivery service amid the ongoing COVID-19 pandemic. It incorporated specialty stores such as Kuriya Japanese Market and Ryan’s Grocery, in addition to its link to British retailer Marks & Spencer.

Shopee wants to do just the opposite. It already has a grocery delivery service and now wants to expand into food delivery.

In early March, Shopee Malaysia had launched a fresh food grocery delivery service in the Klang Valley area of ​​Greater Kuala Lumpur. Months later, he wants to launch ShopeeFood in Malaysia.

s-mart shopee
S-Mart / Image Credit: Shopee

In the same way, Shopee has done it S-Mart i Shopee Supermarket in Singapore. S-Mart aims to be a “one-stop shop for all the needs of your home” and carries a wide range of basic household items, from fresh groceries to household cleaning products.

All S-Mart items are eligible for a 10% cash back box so shoppers can enjoy greater savings. Shopee also agrees to deliver the items within three days of placing the order. If delivery arrives later, a $ 4 voucher will automatically be credited to the buyer’s account.

supermarket shopee
Shopee Supermarket / Image Credit: Shopee

On the other hand, Shopee Supermarket offers more than 20,000 items for the home, a 50% daily return voucher and free shipping at a minimum cost of $ 40 S.

Since Shopee already offers online grocery delivery services (either in Singapore or regionally), moving to food delivery services is just a natural progression.

Leveraging the existing user base and infrastructure

Shopee has already established itself as the leader in e-commerce in Singapore.

From the first quarter of 2021, Shopee was the most visited e-commerce website with approximately 12 million monthly web visits.

As it aims to expand its lead in e-commerce, it’s no wonder Shopee is looking at new markets or lines of business to generate more revenue.

According to a report from The Asean Post, the Southeast Asian food supply market will grow from $ 2 billion in 2018 to an estimated $ 8 billion in 2025.

Even if ShopeeFood captures only 10% of this 2025 market, it would provide an additional $ 800 million annually for Sea.

shopeefood
ShopeeFood Delivery Pilot / Image Credit: BM Global News

Shopee’s chances of success in the food delivery space are certainly better when it comes to high volumes. You can easily compete with other players by capitalizing on the large existing customer base and turning them into ShopeeFood users, which helps reduce customer acquisition costs.

Also, adding a new service like food delivery is similar to inserting a new feature.

In many ways, the technology and operational footprint needed for e-commerce are not completely different from food distribution, so most of the infrastructure would already be there and probably just need to be modified.

Shopee’s main business is e-commerce and food delivery is no different materially. The ultimate goal of the two verticals is to deliver goods to customers ’doors.

Missing on the logistics front

One thing the big three (GrabFood, Deliveroo and foodpanda) have an edge over the e-commerce giant is logistics.

shopee xpress
Shopee Xpress / Image Credit: Shopee

Shopee’s own fleet, ShopeeXpress, isn’t that strong, but Shopee’s strong financial capability could help it stay ahead of the competition.

Since the food delivery landscape is incredibly competitive right now, ShopeeFood should invest heavily in subsidies for both merchants and users. Given the performance of Sea shares, the capital required should not be a challenge.

His huge financial shipowner is his biggest advantage over his competitors and he can easily spend money on recruiting a group of riders dedicated to making food deliveries.

All in all, the delivery aspect is something Shopee needs to expand on. You already have most of the necessary existing points of contact with customers, so you just have to rely on that.

There are many possibilities for ShopeeFood to expand into S’pore

One conclusive suggestion that ShopeeFood could expand into Singapore is that it currently is hiring for a product management function which is headquartered in Singapore.

work shopeefood singapore
Screenshot of the Shopee website

According to his job description, Shopee said the new hiring will have the opportunity to “drive the conceptual and technical development of ShopeeFood product ideas, improve data accuracy and better position ShopeeFood as the delivery platform. preferred food in the region “.

One of its key functions is to lead and design the roadmap for ShopeeFood products, effectively review the input and evolving needs of stakeholders to improve current product features, as well as propose new products and ensure alignment with all stakeholders.

It appears that so far there is only one ShopeeFood role in Singapore, although the company is likely to gradually increase recruitment in the future.

If and when ShopeeFood launches in Singapore, that would mean more competition for players. However, it is a victory for consumers, as companies compete to win our portfolios.

Plus, it’s a good time to enter the market now. Food delivery services are especially crucial during this pandemic, as restaurants in restaurants remain restricted.

In addition, moving to the food delivery segment will give Sea the opportunity to target a new group of customers and, most importantly, capture all the backend data.


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Featured Image Credit: ShopeeFood Indonesia





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