Singapore’s e-commerce giant Shopee makes its way to the Indonesian food delivery market with ShopeeFood

The Indonesian food delivery market is primarily dominated by Grab’s GrabFood and Gojek’s GoFood, however, this year Singapore’s e-commerce giant Shopee has a made a quiet entry into this segment with its food delivery platform ShopeeFood.

How it all started?

The news about Shopee moving into the food delivery space has been circulating in media for some time and the company had made a ShopeeFood page available on its e-commerce platform since last year. Shopee had even been promoting this new feature on its social media pages recently.

At the beginning of January 2021, ShopeeFood had placed ads on its Instagram post for driving-partners recruitment in Jakarta. The attractive rider packages have attracted many riders from GrabFood and Gojek.

ShopeePay in July 2020 teamed up with a short-distance food delivery service, AtozGo that is available only in selected commercial and residential buildings in Jakarta. This marked ShopeePay’s entry into the last mile grocery and food delivery space. A ShopeeFood driver app was made available on the Google Play store and has been installed over 50000 times since then. The company has already curated over 500 fast food and beverages sales partners and are committed to increase sales partners and expand its scope outside Jakarta as well.

Will ShopeeFood make headway in this space?

Food delivery is not a new space for Sea Group, Shopee’s parent company which acquired Vietnam’s Foody Corporation for US$64 million in 2017. Now, Vietnam’s popular food delivery platform operated by Foody has been locked in severe competition with Grab. It generates 42% of the food delivery Gross Merchandise Value in Vietnam.

Entering into the Indonesian food delivery space will allow the Sea Group to not only capture all the data on the back-end but will enable them to target an altogether new set of consumer base.

In Southeast Asia in 2020, Indonesia had the largest food delivery service market in terms of GMV (Gross Merchandise Value). Jakarta with its high consumption power, concentrated population and high internet penetration rate has always been battlefield for industries dealing in food delivery and ride hailing services.

According to reports, almost 69% of Indonesians order food delivery at least once a month and Shopee with its over 40 million monthly active user base in Indonesia have an edge to make its mark in the Indonesian food delivery segment.

The Indonesian food delivery market has been dominated by Grab and Gojek with GrabFood squeezing GoFood’s significant market share in the last two years. It seems that both GoFood and GrabFood have an advantage over the e-commerce giant especially in terms of logistics.

The two tech-giants had made a natural progression from branching into the food delivery space from ride-hailing services and in the process they have built up a strong logistics fleet. However, ShopeeXpress, Shopee’s in-house fleet remains miles behind the two but Shopee’s financial strength could eventually help in staying ahead of the competition.

With Shopee’s greater influence and ecology, a lot more action is expected in the Indonesian food delivery service market.