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GrabFood expansion in Vietnam brings joy, but not to everyone

Thursday, January 31, 2019, 15:00 GMT+7
GrabFood expansion in Vietnam brings joy, but not to everyone
A GrabFood shipper and his customer are seen in this supplied photo.

Ngoc An, who works at a bank office in Son Tra District in the central city of Da Nang, is busier than ever during these last days of the lunar year, thanks to a huge number of financial reviews she is tasked with doing.

At work, An is ‘tied up’ with her computer, and at home, she could not afford preparing lunch to eat at the office as she just runs out of time and energy for shopping, cooking, and cleaning. There are not many restaurants around her bank, and sometimes having lunch just slipped her mind.

Thanks to a colleague’s suggestion, An discovered a place selling delicious meals through a food delivery app. Now with just a few steps on her smartphone, An is able to enjoy a nutritious and affordable lunch every day.

"Every afternoon, my colleagues would turn to the app to look for promotions and order the food they want,” An said.

Ngoc An is only one of an increasing number of customers in Vietnam’s food delivery market.

For many people, ordering food via app is their very first choice thanks to its convenience, compared to cooking.

Since mid-2018, many domestic and foreign enterprises have launched their own food delivery applications, making food delivery a vibrant and attractive market in Vietnam.

Most recently, GrabFood, a member of Grab and one of the most popular food delivery applications, has officially  expanded its presence in Vietnam to 15 provinces and cities, from the first three metropolises of Ho Chi Minh City, Hanoi and Da Nang.

The expansion is seen as a breakthrough for GrabFood, as it allows the ‘latecomer’ in the food delivery market to catch up with existing players. GrabFood has even outplayed some opponents, in terms of the scale and speed of expansion.

The app has become the fastest growing food delivery service in Vietnam.

While many people are happy with the rapid expansion of GrabFood, others are concerned that this will bring about significant changes for the online food ordering and delivery market.

Many are happy

Customers all over the country are the first beneficiaries of GrabFood’s expansion, as the convenient food delivery service is now available not only in big cities like Ho Chi Minh City, Hanoi or Da Nang, but also their neighboring localities.

It is also anticipated that Grab have plans to offer many incentive programs and discount codes, or provide "rewards" to its users whenever it enters a new domestic market.

The second beneficiaries have to be the ‘merchant-partners,’ or those restaurants who reach customers via GrabFood, in these 15 provinces and cities.

The merchants now have more opportunities to grow their business and increase profits without having to invest in online marketing and running delivery teams. Thanks to GrabFood, restaurants, from affordable to luxury ones, can stand more chance to access a huge number of users from Grab.

“As estimated, my profit margin increased by 300 percent after two months joining in the GrabFood network,” said the owner of a bubble tea shop in Hanoi.

The merchant-partners also have the opportunity to participate in GrabFood's special programs, such as "GrabFood Signature," which cooperates with strategic partners such as Gong Cha and Meat Fresh to create exclusive dishes to provide more various choices to customers.

Finally, driver-partners will be the third beneficiaries.

Grab drivers in smaller provinces may not have as many customers as their colleagues do in big cities, and the arrival of GrabFood will help them increase their incomes.

Currently, each driver earns VND600,000 - VND700,000 (US$26-$30) a day from driving for both GrabBike and GrabFood.

"Early in the morning, I am a GrabBike driver picking up passengers , and during noontime, I am a GrabFood shipper delivering food,” Minh Dat, a driver in the outlying district of Nha Be in Ho Chi Minh City, said.

And some are concerned

GrabFood’s expansion to a total of 15 provinces and cities also created a lot of pressure for other players, making the Vietnamese online delivery market more intensed than ever.

While some of its competitors are still struggling to find their ways to develop their driver networks and improve their speed of delivery, Grab has affirmed its position as the fastest growing service in a very short time. This gets other brands to be cautious and quickly change their moves.

One of the prominent players, LaLa, has officially stopped operating after a year of joining this market. FoodPanda, a successful service in many markets, withdrew from Vietnam in 2005.

Against the expansion of GrabFood, the stories of LaLa and FoodPanda prove that money is not everything. Just relying on discounts and promotions to attract customers is not enough to prevent online delivery business from stopping at a dead end.         

GrabFood is known to focus on maintaining a three-element system of customers, merchants and driver-partners that support one another.

Customers generate income for driver-partners. An extensive network of drivers will help deliver food to customers in the shortest possible time. And behavioral data of millions of customers of GrabFood will be of great value for the marketing and growing strategies of restaurants.

In addition, having many exclusive dishes through “GrabFood Signature” with well-known restaurants also helps Grab impress its customers. These dishes are constantly in the top three most ordered food items within a month from its launch. On average, one in ten customers chooses dishes listed in the “GrabFood Signature” program every week.

"We provide a platform for restaurants to test new formulas, create exclusive menus to boost sales and customer satisfaction," Grab said.

Tap Luong

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