Choosing a Food Delivery Platform: Is the Marketplace Really the Best?
Key considerations when starting a delivery & takeaway business
The Rise of Food Delivery Platforms
Is the food delivery platform the future of the F&B industry? According to an independent research study in the US, majority of consumers still rely on their friends when looking for food recommendations, but a growing number are going online to find their next meal. Search data from Google also shows that there are millions of queries for food in Singapore every month, with over 7 million impressions on search results overall.
Meanwhile, Frost & Sullivan’s recent analysis on the Southeast Asian food delivery market shows “promising growth opportunities”, with “[i]ncreasing internet penetration and mobile applications” contributing to a compound annual growth rate of 14.1%. By 2030, the gross merchandise value (GMV) of the market is predicted to reach $49.72 billion.
Taken together, these findings present a compelling argument for F&B brands to digitalise in order to capture a share of the pie. Furthermore, building a food delivery platform on top of existing dine-in operations creates an additional revenue stream and opportunities for increasing new customer acquisition.
Of course, all this is easier said than done. The difficulty lies in finding a system that’s cost-effective and easy to access in order to reach as many diners as possible.
| Oddle e-Shop | Marketplaces (Grab. Deliveroo, foodpanda) | DIY e-Shop (WordPress, Wix, etc.) | |
|---|---|---|---|
Degree of Customisation |
High |
Limited |
High |
Commission Fees |
10% |
~30% |
None |
Average Basket Size (ABS) |
7x bigger than Marketplaces |
Smaller than e-Shop |
Varies |
Set Up Costs |
Zero |
Activation fees required |
Varies |
Fully-managed Logistics |
Yes |
Yes |
No |
Marketing |
Fully-managed marketing services |
Limited platform marketing |
Manage own marketing |
Brand Visibility |
High search visibility |
Diluted share of voice as your brand is one of many |
Varies |
Choosing a Food Delivery Platform in Singapore
The table above draws a comparison between the 3 broad options for online deliveries & takeaways. We’ve picked out the key considerations of merchants when deciding which platform(s) to use.
1. The accessibility of marketplace apps (Grab, foodpanda, Deliveroo)
Marketplace apps like GrabFood and Deliveroo are often top of mind when merchants think of choosing a food delivery platform in Singapore. This is a credit to their accessibility and widespread usage. Listing on such apps is quick and efficient, and logistics are fully-managed, leaving restaurants to focus solely on their core business of making food.
Merchants can also leverage on the already-existing customer base of such apps to build brand awareness and gain new customers in the process. These benefits, however, are limited by the restrictive delivery radius of marketplace apps. Your brand is often only visible to those in your local vicinity.
This might be further hampered still by the minimal customisation allowed on marketplaces. Besides the name of your restaurant and a small banner image, all storefronts have a similar look and feel, making it difficult to stand out in an already crowded space.
With high commission rates (~30%), costly activation fees, and a small average basket size per order, merchants might find that listing on a marketplace is more costly than expected.
2. Complete control with your own food delivery platform
The easiest way to take charge of all aspects of your brand is to build your own food delivery website. This is possible even without coding experience, as platforms like WordPress and Wix offer a basic template for brands to start with. The degree of customisation is extremely high, as you’ll be able to determine exactly how your website looks in order to bring out the best of your brand’s identity.
But the greatest draw for merchants is arguably the lack of commission fees. By cutting out the middleman, you’ll be able to own all revenue earned. That being said, such benefits would have to be measured against the time-consuming nature of running your own platform. Your focus would have to be split between coordinating your own logistics, establishing & maintaining a website, and investing time into marketing efforts to ensure diners are aware of your food delivery platform.
3. Having the best of both worlds: your Oddle e-Shop advantage
For most merchants, Oddle presents the perfect middle ground. As an online white-label platform built for F&B brands, Oddle provides merchants the tools to take charge of their own food delivery website, easily customisable with a drag-and-drop builder module.
There are no set up fees or maintenance fees involved, and merchants can implement their own delivery parameters by determining fees based on distance and minimum spend.
This flexibility has allowed merchants to take orders from customers across the island. Data has also shown that the average basket size of an Oddle e-Shop is 7 times bigger than marketplace orders, and Oddle takes a nominal 10% commission fee compared to the costly ~30% by marketplace apps.
In our efforts to help merchants drive their brand visibility, the Oddle e-Shop has been optimised for search engine indexability and mobile viewing, so merchants can enjoy peace of mind knowing that their new sales channel is easily discoverable by customers with a single search. Furthermore, Oddle has its own marketplace platform, Oddle Eats, which serves 1.2 million hungry foodies across the island, and merchants enjoy listing for free.
With a high degree of flexibility and search visibility online, the Oddle e-Shop truly offers the best of both worlds.
In Summary
As the popularity of food delivery platforms worldwide continue to grow exponentially, more merchants are looking to cash in by digitalising their businesses. In Singapore, marketplace apps enjoy great popularity due to their accessibility and high usage rates. However, the high commission rates imposed by such apps have become a bane in the industry, with many looking for alternative platforms to build a more profitable food delivery business.
Oddle aims to empower its merchants with an online delivery & takeaway solution that provides them with the greatest benefits possible, including low commission rates and value-added services like fully-managed logistics and marketing.
We regularly publish how-to guides and insights into the food delivery industry in Singapore. Read more about How to Use Data Analytics for Restaurants, or have a look at Digital Marketing Strategies for your F&B business.
