The internet economy is growing faster than anyone imagined. Southeast Asia's online business was expected to hit USD 50 billion in 2017, according to a study by Google and Temasek Holdings. The report said all sectors, including online travel, online media, e-commerce, and ride-hailing, witnessed "solid growth" in 2017.
Customers relish the convenience of ordering online and just waiting for delivery – no need to brave the crowds and the weather visiting real-world stores or restaurants, to say nothing of the time wasted traveling.
Ordering dinner online
But what this new shopping paradigm has brought about is a radical change in customer expectations.
Phoning in an order for pizza, for example, is nothing new. We’ve been able to do this for years. And we were not annoyed - or even surprised - if we had to wait 30 mins for the delivery.
But now, times have changed. Our attention spans have shortened, and as customers, we are making greater demands on all our suppliers. We are living in the age of “I want it now.” “Good enough” is no longer good enough. The efficiency we used to long for, as consumers, has become what we expect – in effect, the status quo.
Innovate or Be Left Behind
Companies have always had to evolve to provide excellence to their customers continuously. What this new level of expectation means for enterprises is that they must deliver innovation on service or risk being left behind, stuck with yesterday's methods.
When you think about the classic pizza delivery process, you can see how painfully outdated it is. You call in to order, you’re given a 30-minute window to wait, and then you have no idea when your food will arrive. Some companies have started trying to let you track the delivery progress via a mobile app, but those are still cumbersome and imprecise. Is there a better way?
Big Data Ups the Stakes
Yes, there is – the answer is big data.
Big data is powering the trend of innovation, and major food brands are jumping on board. In the US, Pizza Hut for example recently announced plans to add thousands of new drivers and implement a brand-new delivery algorithm. This system is intended to improve the reliability and accuracy of their deliveries by better predicting the amount of time each delivery will take using data about the weather, traffic, local construction, and more.
Today's customers want to be connected, and they want precise information. They want to know that their pizza will be delivered at exactly 7:13 pm by John Smith, driving a blue Honda Civic. They want to know if there will be any delays due to traffic, road works, or the oven needing extra time to preheat. Customers expect specifics, and Pizza Hut aims to deliver on those expectations.
Pizza Hut will be able to gain a clear view on every delivery, enabling them to save time and money, and at the same time increase customer satisfaction.
The same approach is gaining ground here in Singapore, where revenue in the "Food Delivery" segment is forecast to amount to USD 254M in 2018. The growth trend is highly positive – revenues are expected to show an annual growth rate (CAGR 2018-2022) of 20.6% resulting in a market volume of USD 536M in 2022.
Much of this growth is of course delivered by the local operations of international majors like Foodpanda and Deliveroo, but local firms are also looking to seize a share of the market.
Hawker Fare Brought to Your Doorstep
It is well-known that we can’t live without our favorite hawker fare, and several start-ups are aiming to bring those mouth-watering dishes direct to us. This is an attractive proposition for the harried office worker at lunchtime - no more need to queue in the heat and secure seats in a crowded, uncomfortable hawker center.
The local food delivery companies are trying different approaches to compete with the power of the fast-food majors and the likes of foodpanda, which mainly offer dishes from restaurants. Typically, they do not require a minimum order and their delivery charges are as low as SGD 1.50. To keep operating costs low, some deliver only to designated areas like the Central Business District or have specific delivery times.
These innovative start-ups are using technology to change the way Singaporeans enjoy their traditional hawker dishes. Yihawker, which focuses on delivering food from hawker centers in the east and central areas, is adding functions that allow customers to track the number of people waiting in line at a particular stall before going down to the stall, and for hawkers to order ingredients. About 17 hawkers have signed up for these new services.
Founder Jonathan Tan says: "By using technology, hawkers can plan their workload and manage their business more efficiently."
Big Data Transforms Last-mile Logistics
Food delivery tends to grab the headlines, but big data is changing the whole last-mile delivery paradigm, no matter the product. Singapore’s Ninja Van parcel delivery service, for example, has succeeded in expanding across the region and competing with incumbents in the door-to-door delivery area, by using technology to optimize the sorting, packing and delivery processes.
Customers are the beneficiaries of the new big data-based system, which leads to less waiting, more accuracy, and a more consistent experience. In the food sector, with so many competitors looking to carve out market share, Pizza Hut has determined that the time is now to adapt. In the age of Amazon Prime, delivery has become a prime focus for companies looking to delight their customers, who expect to receive their orders in a timelier manner.
Continuing Evolution of Delivery Services
We’ve already reached the point where deliveries arrive in a matter of hours. What does the future hold? Will our pizzas and hawker dishes be delivered by robots, by drones, or by self-driving vehicles? The pace of technology, combined with the ever-increasing expectations of customers, means it’s reasonable to expect such developments before long. For sure, they will become game changers, leading to decreased cost and increased efficiency.
No more wondering when your pizza or your noodles will arrive. Life is too short for cold meals – unless that’s the way you want them.
Kamal Brar, Vice President, and General Manager of Asia Pacific, Hortonworks, contributed this article. The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends.