Market Overview

The Vietnam online food delivery market has witnessed significant growth in recent years, driven by the increasing popularity of digital platforms and the changing consumer behavior towards convenience and time-saving options. Online food delivery services have emerged as a convenient solution for consumers looking for a quick and hassle-free way to order meals from their favorite restaurants and eateries.

Meaning

Online food delivery refers to the process of ordering food through a digital platform, such as a website or a mobile application, and having it delivered to the desired location. It eliminates the need for physical menus and phone calls, allowing customers to browse through various restaurant options, select their preferred dishes, and place an order with just a few clicks. The ordered food is then delivered to the customer’s doorstep, offering a seamless and efficient dining experience.

Executive Summary

The Vietnam online food delivery market has experienced rapid growth in recent years, driven by factors such as increasing smartphone penetration, rising urbanization, and the growing preference for convenience among consumers. The market is characterized by intense competition among both local and international players, who are constantly innovating to attract and retain customers.

Important Note: The companies listed in the image above are for reference only. The final study will cover 18–20 key players in this market, and the list can be adjusted based on our client’s requirements.

Key Market Insights

1. Growing Smartphone Penetration: With the increasing adoption of smartphones in Vietnam, more and more consumers are gaining access to online food delivery platforms. This has significantly contributed to the growth of the market.
2. Changing Consumer Behavior: Consumers are increasingly shifting towards online food delivery services due to their convenience and time-saving benefits. The busy lifestyles of urban consumers have fueled the demand for quick and hassle-free meal options.
3. Emergence of Aggregator Platforms: Aggregator platforms have emerged as a key player in the online food delivery market. These platforms partner with multiple restaurants and offer a wide range of food options to cater to diverse consumer preferences.
4. Technological Advancements: Advancements in technology have facilitated the seamless integration of online food delivery services, making it easier for consumers to browse menus, place orders, and track their deliveries in real-time.
5. Restaurant Partnerships: Online food delivery platforms have formed strategic partnerships with various restaurants and eateries to expand their offerings and provide customers with a diverse range of cuisines and dining options.

Market Drivers

1. Convenience and Time-saving: The primary driver of the online food delivery market in Vietnam is the convenience it offers to consumers. With a few clicks on their smartphones, consumers can order food from their favorite restaurants and have it delivered to their doorstep, saving time and effort.
2. Urbanization and Busy Lifestyles: The increasing urbanization in Vietnam has led to a rise in busy lifestyles, with people having limited time to cook or dine out. Online food delivery services provide a convenient solution for these consumers to enjoy restaurant-quality meals without leaving their homes or offices.
3. Digital Transformation: The digital transformation of the food industry has played a crucial role in driving the online food delivery market. Restaurants and eateries are embracing online platforms to reach a larger customer base and streamline their operations.
4. Increased Disposable Income: Rising disposable income levels among Vietnamese consumers have contributed to the growth of the online food delivery market. As consumers have more discretionary income, they are willing to spend on convenience and premium dining experiences.
5. Promotional Offers and Discounts: Online food delivery platforms often offer promotional deals and discounts to attract customers. These attractive offers and discounts have been effective in driving customer acquisition and retention.

Market Restraints

1. Logistics Challenges: The efficient and timely delivery of food is crucial for the success of online food delivery services. However, logistical challenges, such as traffic congestion and unpredictable weather conditions, can pose obstacles to timely deliveries.
2. Dependency on Third-party Delivery Partners: Online food delivery platforms heavily rely on third-party delivery partners to fulfill orders. Any disruptions or inefficiencies in the delivery process can negatively impact the customer experience.
3. Quality and Freshness Concerns: Maintaining the quality and freshness of food during the delivery process can be a challenge. Customers expect their food to be delivered in optimal condition, and any compromise in quality can lead to dissatisfaction and negative reviews.
4. Competition and Price Wars: The online food delivery market in Vietnam is highly competitive, with numerous players vying for market share. This intense competition often leads to price wars, which can impact the profitability of online food delivery platforms.
5. Limited Delivery Coverage: While online food delivery services are widely available in urban areas, the coverage in rural and remote regions of Vietnam is relatively limited. This restricts the market reach and potential customer base for online food delivery platforms.

Market Opportunities

1. Expansion into Tier 2 and Tier 3 Cities: Online food delivery platforms can explore opportunities for expansion into tier 2 and tier 3 cities in Vietnam. These cities have a significant population and rising disposable incomes, presenting untapped market potential.
2. Partnerships with Cloud Kitchens: The concept of cloud kitchens, which are dedicated kitchen spaces for preparing food exclusively for delivery, is gaining traction in Vietnam. Online food delivery platforms can consider partnering with cloud kitchens to offer a wider range of food options to customers.
3. Focus on Health and Wellness: There is a growing trend of health-conscious consumers in Vietnam who seek nutritious and balanced meal options. Online food delivery platforms can capitalize on this trend by partnering with restaurants that offer healthy and customized meal choices.
4. Integration of Technology: Continuous integration of advanced technologies, such as artificial intelligence and machine learning, can enhance the online food delivery experience. Features like personalized recommendations, voice-based ordering, and intelligent route optimization can attract and retain customers.
5. Enhanced Customer Engagement: Online food delivery platforms can explore opportunities to enhance customer engagement through loyalty programs, interactive mobile applications, and personalized offers. Building strong customer relationships can lead to increased customer loyalty and repeat orders.

Market Dynamics

The Vietnam online food delivery market is a dynamic and evolving industry, driven by changing consumer preferences, technological advancements, and market competition. The following factors contribute to the overall dynamics of the market:

1. Consumer Behavior: Consumer behavior plays a crucial role in shaping the online food delivery market. Factors such as convenience, price, quality, and variety of food options influence consumer choices and preferences.
2. Technological Advancements: The continuous advancements in technology, such as mobile applications, GPS tracking, and online payment systems, have revolutionized the online food delivery experience. The integration of technology has made it easier for consumers to access food delivery services and for platforms to streamline their operations.
3. Market Competition: The online food delivery market in Vietnam is highly competitive, with numerous local and international players vying for market share. To stay ahead in the market, players need to constantly innovate, improve their services, and offer unique value propositions to attract and retain customers.
4. Changing Regulatory Environment: The regulatory environment governing the online food delivery market is subject to changes and updates. Players in the market need to stay abreast of any regulatory developments and ensure compliance with relevant laws and regulations.
5. COVID-19 Impact: The COVID-19 pandemic has had a significant impact on the online food delivery market. With restrictions on dining out and social gatherings, consumers increasingly turned to online food delivery services to meet their dining needs, leading to a surge in demand.

Regional Analysis

The online food delivery market in Vietnam can be analyzed regionally to understand the market dynamics and customer preferences in different areas. The market can be divided into major regions such as Ho Chi Minh City, Hanoi, Da Nang, and other key urban centers. Each region has its unique characteristics and demands, influenced by factors such as population density, income levels, and cultural preferences. Understanding these regional nuances can help online food delivery platforms tailor their services and offerings to cater to specific regional needs.

Competitive Landscape

Leading companies in the Vietnam Online Food Delivery Market:

1. Grab Holdings Inc.
2. Gojek (GoFood)
3. Foody Corporation (Now owned by Grab)
4. Baemin (Woowa Brothers Corp.)
5. Now.vn (owned by Sea Group)
6. Vietnammm.com (owned by Delivery Hero)
7. LalaFood (owned by Grab)
8. Beamin (owned by Shopee)
9. Giao Hang Tiet Kiem (owned by Viettel Post)
10. Giao Hang Nhanh (owned by Vietnam Post)

Please note: This is a preliminary list; the final study will feature 18–20 leading companies in this market. The selection of companies in the final report can be customized based on our client’s specific requirements.

Segmentation

The Vietnam online food delivery market can be segmented based on various factors, including:

1. Delivery Model: The market can be segmented based on the delivery model, such as platform-to-consumer delivery and restaurant-to-consumer delivery. In the platform-to-consumer model, the online food delivery platform takes responsibility for the entire delivery process. In the restaurant-to-consumer model, the restaurant manages the delivery or uses third-party logistics partners.
2. Order Type: The market can be segmented based on the type of orders, such as individual orders and group orders. Individual orders refer to single meals ordered by individuals, while group orders involve multiple meals for a group of people.
3. Cuisine Type: The market can be segmented based on the type of cuisine offered, such as Vietnamese cuisine, Western cuisine, Asian cuisine, fast food, and others. This segmentation allows customers to choose from a wide range of cuisines based on their preferences.
4. Payment Method: The market can be segmented based on the payment methods accepted, including cash on delivery, online payment, and digital wallets. This segmentation caters to the diverse payment preferences of customers.
5. Customer Type: The market can be segmented based on customer types, such as individual customers, corporate customers, and event catering. Each customer type has specific requirements and preferences, and online food delivery platforms can tailor their services accordingly.

Segmentation helps online food delivery platforms target specific customer segments, understand their needs, and offer personalized services to enhance customer satisfaction and loyalty.

Category-wise Insights

The online food delivery market in Vietnam encompasses various categories of food, catering to diverse customer preferences. Some popular categories include:

1. Fast Food: Fast food is a popular category in the online food delivery market, with customers opting for quick and convenient options such as burgers, pizzas, and fried chicken. Fast food chains have partnered with online food delivery platforms to expand their reach and cater to customer demand.
2. Asian Cuisine: Asian cuisine, including Vietnamese, Chinese, Thai, and Japanese dishes, is widely available for online delivery. Customers can explore a variety of Asian flavors and specialties through online food delivery platforms.
3. Western Cuisine: Western cuisine, including Italian, American, and European dishes, is another popular category in the online food delivery market. Customers can enjoy a range of pasta, burgers, sandwiches, and other Western favorites from the comfort of their homes.
4. Vegetarian and Vegan Options: With the rising demand for vegetarian and vegan food, online food delivery platforms offer a separate category for plant-based meals. This category caters to the preferences of health-conscious and environmentally conscious consumers.
5. Desserts and Beverages: Desserts and beverages, including cakes, ice creams, bubble tea, and smoothies, are also available for online delivery. Customers can satisfy their sweet tooth or enjoy refreshing beverages without leaving their homes.

These categories cater to a wide range of tastes and preferences, ensuring that customers have ample choices when ordering food online.

Key Benefits for Industry Participants and Stakeholders

The Vietnam online food delivery market offers several benefits for industry participants and stakeholders:

1. Increased Revenue: Online food delivery platforms have witnessed significant revenue growth due to the surge in demand for their services. The market provides a lucrative opportunity for platforms to generate revenue through commissions from restaurants, delivery fees, and promotional partnerships.
2. Enhanced Visibility for Restaurants: Partnering with online food delivery platforms allows restaurants to expand their customer base and gain visibility in the competitive market. It enables them to reach customers who prefer the convenience of online ordering and delivery.
3. Improved Customer Engagement: Online food delivery platforms provide a direct channel of communication between restaurants and customers. Restaurants can engage with customers through personalized offers, feedback mechanisms, and loyalty programs, fostering stronger customer relationships.
4. Efficient Logistics Management: Online food delivery platforms invest in robust logistics infrastructure to ensure timely and efficient deliveries. This benefits stakeholders such as delivery drivers, who have increased earning opportunities, and customers, who receive their orders promptly.
5. Market Insights and Analytics: Online food delivery platforms gather valuable data and insights on customer preferences, ordering patterns, and market trends. This information can be utilized by industry participants and stakeholders to make data-driven decisions, optimize operations, and tailor their offerings to customer needs.

The Vietnam online food delivery market provides a win-win situation for industry participants, restaurants, delivery partners, and customers, offering a range of benefits and opportunities for growth.

SWOT Analysis

A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the Vietnam online food delivery market can provide a comprehensive understanding of its internal and external factors:

1. Strengths:

• Wide variety of food options and cuisines available for online delivery.
• Convenience and time-saving benefits for customers.
• Strong logistics networks and delivery infrastructure.
• Continuous technological advancements enhancing the customer experience.
• Strategic partnerships with restaurants and eateries.

2. Weaknesses:

• Logistical challenges, including traffic congestion and unpredictable weather conditions.
• Maintaining food quality and freshness during the delivery process.
• Dependency on third-party delivery partners.
• Intense competition and price wars impacting profitability.
• Limited delivery coverage in rural and remote regions.

3. Opportunities:

• Expansion into tier 2 and tier 3 cities with rising disposable incomes.
• Partnerships with cloud kitchens to offer a wider range of food options.
• Focus on health-conscious consumers and offering customized meal choices.
• Integration of technology for personalized recommendations and efficient delivery.
• Enhanced customer engagement through loyalty programs and personalized offers.

4. Threats:

• Intense competition among local and international players.
• Regulatory changes impacting the market landscape.
• Disruptions in the supply chain and delivery process.
• Quality and service-related challenges impacting customer satisfaction.
• Economic uncertainties and fluctuating consumer spending.

By analyzing the strengths, weaknesses, opportunities, and threats, industry participants can develop strategies to capitalize on the market’s strengths, mitigate weaknesses, seize opportunities, and address potential threats.

Market Key Trends

The Vietnam online food delivery market is witnessing several key trends:

1. Integration of Delivery and Dine-in Experience: Online food delivery platforms are exploring opportunities to integrate the delivery and dine-in experiences. Some platforms offer table booking services, allowing customers to reserve tables at their preferred restaurants through the same platform.
2. Focus on Sustainability and Eco-Friendly Practices: There is an increasing focus on sustainability in the online food delivery market. Platforms are implementing eco-friendly packaging solutions and partnering with restaurants that prioritize sustainable sourcing and practices.
3. Hyperlocal Delivery: Hyperlocal delivery, which focuses on delivering food from nearby restaurants, is gaining popularity. This trend ensures faster deliveries and supports local businesses, as customers prefer fresh and quickly delivered meals.
4. Virtual Restaurants and Dark Kitchens: Virtual restaurants and dark kitchens, which operate solely for online food delivery, are on the rise. These establishments cater exclusively to the online market, enabling restaurants to expand their offerings without the need for a physical dining space.
5. Contactless Delivery and Safety Measures: In response to the COVID-19 pandemic, online food delivery platforms have implemented contactless delivery options and stringent safety measures. This trend is likely to continue, as customers prioritize safety and hygiene.

Keeping up with these key trends allows online food delivery platforms to stay relevant, meet customer expectations, and adapt to evolving market dynamics.

COVID-19 Impact

The COVID-19 pandemic has had a significant impact on the Vietnam online food delivery market. The restrictions on dining out and social gatherings have accelerated the adoption of online food delivery services. The following are the key impacts of COVID-19 on the market:

1. Surge in Demand: With movement restrictions and lockdowns, consumers increasingly relied on online food delivery to meet their dining needs. The market witnessed a surge in demand as people preferred the safety and convenience of ordering food online.
2. Shift in Consumer Behavior: The pandemic has led to a significant shift in consumer behavior, with more individuals embracing online food delivery as a regular dining option. This change in behavior is expected to have a long-term impact on the market, even as restrictions ease.
3. Increased Health and Safety Measures: Online food delivery platforms implemented strict health and safety measures to ensure the safety of customers and delivery partners. This included contactless deliveries, temperature checks, and sanitization protocols.
4. Support for Restaurants: Online food delivery platforms played a vital role in supporting restaurants during the pandemic. By providing a platform for online orders and deliveries, they helped restaurants continue their operations and reach customers despite dining restrictions.
5. Rise of Home-based Cooking: The pandemic also led to a rise in home-based cooking and DIY meal kits. Some online food delivery platforms introduced meal kits that allowed customers to recreate restaurant-style meals at home, providing an alternative dining experience.

The COVID-19 pandemic has accelerated the growth and adoption of online food delivery services in Vietnam. While the long-term impact is yet to be fully realized, the market is expected to continue its upward trajectory as consumers embrace the convenience and safety offered by online food delivery.

Key Industry Developments

The Vietnam online food delivery market has witnessed several key industry developments:

1. Strategic Partnerships and Acquisitions: Online food delivery platforms have engaged in strategic partnerships and acquisitions to expand their market presence and offerings. This includes partnerships with restaurants, cloud kitchens, and technology companies to enhance delivery capabilities and customer experience.
2. Investments in Technology: Online food delivery platforms have invested heavily in technology to improve the customer experience and operational efficiency. This includes the integration of artificial intelligence, machine learning, and data analytics to provide personalized recommendations, optimize delivery routes, and enhance order accuracy.
3. Focus on Sustainability: The industry has shown a growing focus on sustainability, with platforms and restaurants adopting eco-friendly practices and packaging solutions. This includes the use of biodegradable packaging, reducing single-use plastics, and promoting sustainable sourcing practices.
4. Diversification of Services: Online food delivery platforms have diversified their services beyond food delivery. Some platforms now offer grocery delivery, medicine delivery, and other essential items, expanding their service offerings and attracting a broader customer base.
5. Hyperlocal Expansion: Online food delivery platforms are focusing on hyperlocal expansion, targeting specific neighborhoods and areas to ensure faster deliveries and better customer service. This approach enables platforms to cater to local preferences and support local businesses.

These key industry developments highlight the dynamic nature of the market, with players constantly innovating and adapting to changing consumer demands and market trends.

Analyst Suggestions

Based on the analysis of the Vietnam online food delivery market, the following suggestions can be made for industry participants:

1. Enhance Delivery Infrastructure: Invest in robust delivery infrastructure and logistics management to ensure timely and efficient deliveries, even during peak demand periods. This can include leveraging technology for route optimization and real-time tracking.
2. Focus on Customer Experience: Prioritize customer experience by offering personalized recommendations, efficient customer support, and easy-to-use mobile applications. Ensure seamless ordering, accurate delivery updates, and hassle-free payment options to enhance customer satisfaction and loyalty.
3. Strategic Restaurant Partnerships: Form strategic partnerships with popular and diverse restaurants to offer a wide range of food options to customers. Collaborate with local and international cuisine providers to cater to varied customer preferences.
4. Embrace Technology: Continuously integrate technology to improve operational efficiency and customer engagement. Explore the use of artificial intelligence, machine learning, and data analytics to optimize operations, personalize offerings, and enhance the overall customer experience.
5. Adapt to Changing Consumer Preferences: Stay abreast of evolving consumer preferences and market trends. Continuously innovate to meet customer expectations, such as offering healthy meal options, sustainability initiatives, and contactless delivery measures.

By implementing these suggestions, online food delivery platforms can position themselves for success, differentiate themselves in the competitive market, and meet the evolving needs of customers.

Future Outlook

The future outlook for the Vietnam online food delivery market is highly positive, with significant growth potential. The market is expected to continue expanding, driven by the following factors:

1. Rising Disposable Income: As disposable incomes continue to rise in Vietnam, consumers are expected to allocate a larger portion of their budget to dining out and ordering food online. This presents opportunities for online food delivery platforms to cater to the growing demand.
2. Technological Advancements: Advancements in technology, such as improved mobile applications, artificial intelligence, and automation, will further enhance the online food delivery experience. These innovations will enable platforms to offer personalized recommendations, faster deliveries, and seamless ordering.
3. Expanding Market Reach: Online food delivery platforms are likely to expand their reach to untapped markets, including tier 2 and tier 3 cities. This expansion will be driven by increasing smartphone penetration, rising urbanization, and the growing preference for convenience in these regions.
4. Focus on Health and Sustainability: With a rising awareness of health and sustainability, online food delivery platforms will increasingly cater to the preferences of health-conscious and environmentally conscious consumers. This includes offering healthier meal options, promoting sustainable practices, and partnering with eco-friendly restaurants.
5. Competition and Innovation: The market is expected to remain highly competitive, with players constantly innovating to differentiate themselves. This will lead to the introduction of new services, unique partnerships, and enhanced customer engagement strategies.

Overall, the Vietnam online food delivery market is poised for significant growth and innovation in the coming years, driven by changing consumer behaviors, technological advancements, and market dynamics.

Conclusion

The Vietnam online food delivery market has witnessed remarkable growth, driven by the increasing preference for convenience and time-saving options among consumers. The market offers a wide range of food options, catering to diverse customer preferences, and is characterized by intense competition among local and international players.