Singapore-based food delivery companies Grab and Foodpanda are capitalizing on the desire for dining out as the world emerges from the pandemic. Both apps are now venturing into the dine-in space, offering users the opportunity to pre-purchase dine-in vouchers at discounted rates. This move comes as consumers seek to enjoy meals at restaurants while also finding ways to save on costs.
Grab’s Dine-In Feature
Grab, one of the leading food delivery apps in Southeast Asia, is currently testing its dine-in feature across 15 cities in Singapore, Thailand, and Indonesia. Users can not only benefit from discounts of up to 50% on dine-in vouchers but also access restaurant menus, read reviews, place orders, and make payments through a QR-based system. Grab even allows users to book rides to the chosen restaurant, offering a seamless dining experience. The company plans to expand its dine-in service to Malaysia, the Philippines, and Vietnam in the near future.
Foodpanda was the first food delivery company in Singapore to introduce dine-in features, rolling them out in 2021. Currently available across several countries, including Singapore, Thailand, the Philippines, Malaysia, Hong Kong, Pakistan, and Bangladesh, Foodpanda Dine-in has already enticed over 8,000 restaurants to offer discounts ranging from 15% to 25%. The company recognizes the massive potential in the dine-in market and believes it can become a significant revenue stream alongside its existing food delivery and grocery delivery services.
Since dining out costs have risen due to inflation, consumers are actively seeking ways to save on their dining experiences. Deals and discounts offered by food delivery apps make eating out more affordable and provide a sense of satisfaction. According to Jonathan Woo, senior analyst at Phillip Securities Research, offering discounts helps Grab and Foodpanda generate incremental revenue. These companies earn commission fees for each dine-in voucher purchase, leading to monetization from existing users and increased exposure for food and beverage merchants.
Foodpanda, in collaboration with restaurant solutions provider TabSquare, has taken steps to automate food ordering processes. This collaboration enables digital menus, QR ordering, and various other streamlined features. This advancement enhances the overall dining experience by reducing waiting times and improving customer satisfaction. Food delivery service AirAsia Food also offers dine-in services in partnership with the restaurant reservation platform eatigo, and they provide a unique queuing service in Thailand, allowing users to book riders to stand in line at restaurants.
Predicted Growth in the Dine-In Market
Despite the exponential growth seen in the food delivery industry over recent years, it is expected that the market will experience a shift towards dine-in services in the future. Investment banking firm Benchmark Company anticipates a normalized growth rate of 13% through 2025, as consumers return to dining out and shift their focus away from on-demand delivery. This change is attributable to reduced incentives for frequent food delivery and a greater emphasis on cash preservation by high-growth companies.
The Competitive Landscape and Profit Margins
Chinese tech giants like Alibaba and ByteDance have already implemented similar dine-in services alongside their food delivery platforms. Meituan, a leading Chinese food delivery company, offers dine-in vouchers as part of their in-store dining services. Sachin Mittal, head of telecom, media, and internet sector research at DBS Bank, points out that this model is a natural step for food delivery apps in their efforts to support restaurants and increase profit margins. By eliminating delivery charges, both the app and the restaurant can benefit financially.
Grab and Foodpanda’s expansion into the dine-in space reflects the evolving dining habits of consumers post-pandemic. These services cater to customers looking for dining experiences while also seeking cost savings. As food delivery companies embrace automation and collaborate with industry partners, the dine-in market is set to grow, potentially becoming a significant revenue stream alongside food delivery services. With the anticipated recovery of the food delivery industry, these companies are poised for continued success and an enduring impact on the local dining scene.
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