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Why Delivery Services Are So Popular in ASEAN
Food delivery services, which experience rapid growth around the world, are especially sought after in Southeast Asia.By Kim Kyung-young Reporter, TECH M

One Korean food delivery app, in an early TV commercial, quickly became popular thanks to a slogan that roughly translates to “Delivery is in our DNA!” Indeed, no matter where people live, they must address their need for food, clothing, and housing. In recent years, the food paradigm has begun to shift, from food being merely a means to survival to something that can be supplied and consumed in diverse ways. As a result, food delivery services have transformed into a multinational industry.

Delivery services are enjoying an unprecedented boom in ASEAN countries. The reason for this is believed to be two-fold: firstly, the simultaneous occurrence of technological advances, as manifested in the development of mobile-based online telecommunications networks, increased smartphone usage, and economic growth, and secondly, the outbreak of the COVID-19 pandemic.

Other factors that can help explain how ASEAN countries expanded the food delivery pie are rooted in regional characteristics, such as widespread use of motorcycles, the most common mode of transport of delivery workers, and a hot and humid climate that makes consumers prefer to rely on deliveries rather than going out to eat. Currently, Foodpanda and Grab Food are the biggest industrial players in the ASEAN region, with Korean platforms such as Naver, Kakao, Line, Coupang, and Baedal Minjok actively gearing up to enter the Southeast Asian market.

Many companies, having seen the potential of food delivery services in ASEAN countries, are competing fiercely to dominate the market and invest significant efforts to secure a loyal customer base. The issue, however, as in any other industry, is profitability. The problem is that there are many similar-looking companies fighting for the biggest piece of the pie. This, combined with the shared desire to gain even just one more customer than their competitors, is leading to a dumping war that is fueled primarily by benefits such as delivery commission waivers and discount coupons for orders.

Some experts stress that, in order to survive the rough-and-tumble of the quickly-growing ASEAN market, delivery service companies will have to develop a unique strength that cannot be copied by the competition. They also recommend that services should be modified to reflect the tendency of customers to pay in cash and design marketing strategies that are tailored to local customs and sociocultural factors.