Southeast Asia food delivery platforms’ total gross merchansdise value (GMV) grew 5 percent year on year to $16.3 billion in 2022, from $15.5 billion in 2021, a report said Tuesday.

According to Momentum Works, the growth was mainly driven by the relatively smaller markets of the Philippines ($2.4 billion), Malaysia ($2.2 billion) and Vietnam ($1.1 billion).

Meanwhile, larger markets – Indonesia ($4.5 billion), Thailand ($3.6 billion) and Singapore ($2.5 billion) recorded declines in 2022.

Philippines, Malaysia and Vietnam have recorded significant growth as players including Grab and ShopeeFood expanded penetration.

Grab has taken market share leadership in Malaysia and Vietnam from Foodpanda and ShopeeFood respectively, and now contributes 54 percent of the region’s total platform GMV.

ShopeeFood, on the other hand, has reduced market-share-grabbing incentives, while Foodpanda/DeliveryHero is rumored to be in the process of exiting a few markets in the region.

As for Indonesia, Thailand and Singapore, the decline was due to different factors of varied significance. For example, reopening in Singapore shifted food services demand offline.

In Thailand, the withdrawal of government subsidies after October as well the floods in second half of the year played significant roles.

Momentum Works said food delivery platform endure strong headwind against growth in 2022, which include the capital markets’ demand for profitability (especially most leading payers are now part of pubic-listed groups), as well as Southeast Asia’s reopening from the Covid-19 pandemic.

It said the post-covid reopening, including dine-in, travel and government policy shifts, have impactdd the food delivery demand in the region.

It also said the rising interest rates lead to a difficult capital environment for tech firms, including major food delivery platforms. As a result, margin improvement or path to profitability become the top priority for these platforms.

It also said food and beverage merchants, as well as major delivery platforms, are making more efforts to integrate online and offline.

Meanwhile, dark stores (a brick-and-mortar location that has been shut down and turned into a center for fulfillment operations) are giving way to ‘grey stores’.

Among the players, Grab topped the list with a GMV of $8.8 billion in 2022. This was followed by Foodpanda ($3.1 billion), Gojek ($2 billion), LINE MAN ($900 million) / Shopee Food ($900 million).

Of the major regional players, Grab was the only one which sustained GMV growth consecutively for the last three years. It also has the best net cash position compared to its peers to sustain investment.

Meanwhile, after the surge in investment in 2021, Shopee has scaled back to focus on making its core ecommerce business profitable.

It is also noted that Gojek has been stagnant for three years, a reflection of the dynamics and competition in Indonesian market.

In 2021, the food delivery GMV surged 30 percent year on year to $15.5 billion from $11.9 billion in 2020.

The GMV estimation covers only food delivery orders placed through Grab, Foodpanda, GoJek, Deliveroo, LINE MAN, Baemin, ShopeeFood and RobinHood. The GMV includes all the orders made, including failed, cancelled, and refunded orders.

This estimate, however, does not include food delivery orders not placed with any of the platforms, such as customer placing a phone / Whatsapp order directly with the restaurant, which in turn books Grab delivery / Lalamove to deliver the food.

Momentum Works is a venture outfit headquartered in Singapore. It connects and empowers the startup ecosystem in emerging markets through well-researched insights, community, and venture-building experience.

Southeast Asia primed for investments to bridge sustainability opportunities, says Bain & Co, Temasek report