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

Singapore Food Delivery Apps Expand Into Dine-In Space as Post-Pandemic Trends Evolve

Singapore’s leading food delivery platforms, Grab and Foodpanda, are venturing into the dine-in realm as consumer preferences shift towards dining out in the post-pandemic landscape.

Grab, headquartered in Singapore, is currently piloting its dine-in feature across 15 cities in Singapore, Thailand, and Indonesia. This innovative service enables users to pre-purchase dine-in vouchers at discounts of up to 50%. Moreover, customers can conveniently peruse restaurant menus, access reviews, place orders, and make payments using a QR-based system. Additionally, the app offers the facility to book rides to the chosen dining establishment. The company’s ambitious expansion plans include a future launch in Malaysia, the Philippines, and Vietnam.

On the other hand, Foodpanda, which was the pioneer in introducing dine-in features in Singapore last year, has extended its footprint. The Foodpanda Dine-in feature is now operational in Singapore, Thailand, the Philippines, Malaysia, Hong Kong, Pakistan, and Bangladesh. Since 2022, over 8,000 restaurants across these countries have initiated dine-in discounts ranging from 15% to 25%.

Jakob Sebastian Angele, Asia Pacific CEO at Foodpanda, emphasized the company’s foresight in recognizing the potential of dine-in even during the pandemic. Angele said, “We triggered the discussion already during the pandemic. And of course, we knew back then already, that there will be life after [the pandemic].”

This strategic diversification is a part of Foodpanda’s broader business model, which is centered around food delivery as its primary revenue source, closely followed by grocery delivery.

To enhance the dine-in experience further, Foodpanda recently partnered with TabSquare, a Singapore-based restaurant solutions provider. This collaboration aims to streamline the food ordering process through digital menus, QR-based ordering, and other automated mechanisms.

Despite the apparent success of dine-in services, Singapore’s delivery market has faced new competition. AirAsia Food, a renowned food delivery service, has entered the dine-in domain in collaboration with the restaurant reservation platform eatigo. In Thailand, AirAsia Food even offers a unique queuing service, allowing users to book riders to queue on their behalf at restaurants.

Tay Chuen Jein, Head of Deliveries for Singapore at Grab, highlighted the affordability factor in the dine-in experience, stating that offering attractive dine-in vouchers through the app renders eating out more economical. Jonathan Woo, a senior analyst at Phillip Securities Research, emphasized that with rising dining costs due to inflation, consumers are actively seeking cost-effective deals. Woo expressed that Grab’s move could indirectly generate additional revenue through commission fees associated with dine-in voucher purchases.

However, the growing popularity of dine-in services has led to speculation about the impact on food delivery. Investment banking firm Benchmark Company anticipates that as consumers return to dining out, food delivery growth may experience moderation. Despite this, the report projects normalized food delivery growth, with a Compound Annual Growth Rate (CAGR) of 13% through 2025.

Sachin Mittal, head of telecom, media, and internet sector research at DBS Bank, emphasized the pragmatic nature of food delivery platforms diversifying into dine-in services. He noted that such expansion not only supports restaurants but also bolsters profitability by capitalizing on higher profit margins associated with dine-in operations.

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