GrabFood in biggest-ever marketing push
published : 26 Aug 2020 at 06:16
newspaper section: Business
writer: Suchit Leesa-nguansuk
GrabFood will deploy its biggest-ever marketing budget this year to retain its customer base, boost food orders and draw new users as key rivals receive strong financial support and realign their business strategies.
The marketing splurge reflects intensifying competition in the third quarter.
"Grab sees the potential of the food ordering business in Thailand, which continues to grow as the pandemic has changed people's behaviour to use such services, while mobile internet penetration has reached 80%," said Chantsuda Thananitayaudom, marketing head of Grab Thailand.
There is still room to grow in the food ordering market, valued at 35 billion baht, when compared with e-commerce, estimated at 300 billion baht.
During the lockdown from March to May, GrabFood gained new users with orders surging by three times from the pre-pandemic period.
GrabFood covers 35 cities with three cloud kitchens. The service has a plan to expand with an additional two or three cloud kitchens soon.
Grab has 80,000 restaurant partners and 100,000 driver partners.
According to Ms Chantsuda, Grab's revenue from ride-hailing service was on a par with food ordering service in 2019. But this year the pandemic has depressed ride-hailing service by 90%, while the usage of food ordering and parcel delivery has risen.
To boost GrabFood services, Grab is investing the largest amount of marketing budget this year in a new campaign, Free Your Hunger, from Aug 24 to Oct 4.
The campaign offers a wide selection that comes with 100 signature dishes from 75 restaurants. It also offers free delivery service in a radius of three kilometres and 50% discounts through 30,000 deals.
The campaign is intended to double GrabFood customer numbers and sales by restaurant partners.
Ms Chantsuda said food ordering remains unprofitable but continues to grow, and more customers are needed.
"Most of the GrabFood users are 20-39, and we aim to attract office workers and university students to our platform," she said.
Referring to competition in the segment, Ms Chantsuda said GrabFood attempts to achieve a balance among stakeholders in the platform, including the platform itself, drivers, restaurants and consumers, while rivals may try to put the burden on customers.
"We retain the gross profit sharing fee [commission fee] of 15-30% collected from restaurant partners," she said.
GrabFood reduced incentive payment for GrabFood drivers in 27 provinces, excluding Bangkok, Nonthaburi and Pathum Thani, to maintain cash flow. But the base fare for drivers is not changing.
Key rival Line Man recently merged with restaurant review platform Wongnai. Line Man is in the process of reorganising and has yet to launch a major campaign.
- food ordering
- restaurant partners