Singapore-based food delivery apps Grab and Foodpanda are venturing into the dine-in market, catering to consumers who are looking to eat out more now that the pandemic is subsiding. Grab is currently testing its dine-in feature in 15 cities across Singapore, Thailand, and Indonesia. The feature allows users to pre-purchase dine-in vouchers at discounts of up to 50%. In addition, app users can view menus, read reviews, order and pay through a QR-based system, and even book rides to restaurants. Meanwhile, Foodpanda has been the first food delivery company in Singapore to introduce dine-in features this year. Its Foodpanda Dine-in option is available in several countries, including Singapore, Thailand, the Philippines, Malaysia, Hong Kong, Pakistan, and Bangladesh. Over 8,000 restaurants across these countries now offer dine-in discounts ranging from 15% to 25%.
Meeting Consumer Needs
As the cost of dining out rises due to higher inflation, consumers are on the lookout for deals that can help them save money. There is an undeniable satisfaction in enjoying a delicious meal at a discounted price. Jakob Sebastian Angele, Asia Pacific CEO at Foodpanda, expressed confidence in the potential of the dine-in market, calling it “very, very sizable” for Foodpanda. Currently, food delivery remains Foodpanda’s primary business, closely followed by grocery delivery. However, with the introduction of dine-in features, the company aims to tap into the potential of this market.
To enhance the dining experience and streamline food ordering processes, Foodpanda recently partnered with TabSquare, a Singapore-based restaurant solutions provider. This collaboration enables the automation of food ordering through digital menus and QR code-based ordering. The parent company of Foodpanda, Delivery Hero, acquired TabSquare in 2021. Similarly, food delivery service AirAsia Food has collaborated with eatigo, a restaurant reservation platform, to offer dine-in services. In Thailand, AirAsia Food even provides a unique queuing service that allows users to book riders who will queue up at restaurants on their behalf.
According to Tay Chuen Jein, head of deliveries for Singapore at Grab, offering dine-in discounts makes eating out more affordable. These discounts not only help users discover new restaurants but also contribute to reducing the overall cost of dining out. Jonathan Woo, a senior analyst at Phillip Securities Research, emphasized the importance of cost savings for consumers, particularly with rising dining out expenses. Furthermore, Grab can generate additional revenue indirectly through commission fees for each dine-in voucher purchase. This method of increasing monetization from existing users is not only cost-effective but also benefits F&B merchants.
While food delivery has experienced significant growth over the past few years, there are signs that this growth is moderating as consumers resume their normal routines and dine out more frequently. Investment banking firm Benchmark Company predicts a shift towards dine-in experiences, with expected normalized food delivery growth at a compound annual growth rate (CAGR) of 13% through 2025. Grab’s CFO, Peter Oey, stated during the company’s first-quarter earnings call that they anticipate a recovery in deliveries during the second quarter. In fact, deliveries rebounded strongly in April following the Ramadan fasting period and maintained that momentum into May.
Helping Restaurants Thrive
Sachin Mittal, head of telecom, media, and internet sector research at DBS Bank, explains that food delivery apps aim to support restaurants in attracting more customers for dine-in experiences. This move benefits both parties, as restaurants get business through in-store dining and booking, while the absence of delivery charges increases profit margins for both restaurants and delivery apps. Similar strategies have been observed in Chinese tech giants like Alibaba and ByteDance, which offer local life services, including food delivery, in-store dining, travel booking, and group buying.
Singapore-based food delivery apps Grab and Foodpanda have recognized the changing preferences of consumers and are actively expanding into the dine-in space. By offering dine-in features and discounts, these apps aim to not only provide affordable dining experiences but also generate incremental revenue. As the pandemic recedes and people seek to return to normalcy, the partnership between food delivery apps and restaurants in promoting dine-in options becomes crucial in driving growth and meeting consumer needs.
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