How do you get your food delivered? The direct to consumer QSR market | Eureka AI Moment Asia

Michael Hawkins

Friday October 27 2023

Legend has it that the very first instance of Food Delivery at home was in the form of a Pizza delivered to Italian Queen Margherita of Savoy more than 100 years ago.  

These days, what used to be a royal treat is now a daily occurrence to some people thanks to the Food Delivery platforms. We’ve discussed the power of these Super-Apps before, but what about the Quick Service Restaurants (QSR) that also choose to offer delivery services from their own apps?

This week we take an in-depth look at three of our Asian databases to see how consumers use QSR apps and websites vs the ubiquitous On-Demand Food delivery platforms.

QSR Food Delivery User Penetration by Country

To set this category in context, we first need to compare it to the On-Demand Food Delivery Apps in each country.

Interestingly, in both Hong Kong and Singapore we see relatively high category penetration for both QSR and Food Delivery.  This could be due to the legacy nature of food delivery in these bustling metropolises, but it still shows the potential for different models to thrive.

So what drives performance in each market?

QSR App User share and frequency - Hong Kong:

McDonalds delivery dominates the Direct to Consumer QSR market in Hong Kong, with KFC next and the “Value for Money” local brand Cafe de Coral in third.

The most outstanding metric for Hong Kong though is the significant category repeat rate: 45% of all users used a QSR app twice or more in August. The Category average frequency is 3 times a month with most brands above an average of one time.

Analysing this consumer behaviour, we see that the key driver to this behaviour in Hong Kong is likely historical. Older consumers in Urban centres had been enjoying home delivery direct with brands long before the advent of Food Panda or Deliveroo services.

This logic is played out in the category demographic profiles below. 53% of QSR users are over 40 years old compared to only 45% of Food Delivery users.

QSR User share and Frequency - Thailand:

Thailand has a lower overall penetration of QSR but with significant regional differences.

At the national level, the local restaurant chain S&P has the highest share of users, with Minor group’s 1112 and the Pizza company coming in at three and four.  McDonalds sees their lowest share here, but conversely, KFC has their highest.

Digging deeper, we see yet again that the Capital city is not representative of the national picture - which also shows the value of regional data.

While S&P Is strong everywhere outside of Bangkok, 1112 is strongest in the capital with KFC very consistent across the cities.

QSR User share and Frequency - Singapore:

In our newest data source from the Lion City, the most striking statistic for the QSR category is the significance of Starbucks vs McDonalds having similar share of users!

We will be looking deeper into this area more over the coming months, but the signs suggest this is all about ordering on the go via the App.

QSR User share and Frequency - Indonesia:

Finally, we see a fascinating market in Indonesia. Here the Golden Arches again comes out on top with Dominoes Pizza in third, but local hero Kopi Kenangan stands out in second.

Clearly boosted by encouraging payment via the app along with member discounts, Kopi Kenangan is accelerating growth across the country and into both Singapore and Malaysia.  But where are they strongest?

Looking at Jakarta alone, Kopi Kenangan attracts more 8% users than McDonalds. The growth opportunities will come in Jawa Barat and Jawa Timur over the coming months.

And who is buying their coffee online? Unsurprisingly, it is the 26-35 year olds - with 11% more users for Kopi Kenangan in that age group than McD.

So What?

Since the first pizza was delivered (within 30 minutes?) more than 100 years ago, the QSR delivery business has changed significantly.

While McDonalds and the global pizza apps have the muscle to operate their own delivery force and not have to rely on the Food Delivery apps, there are other ways to grow in this area.

Firstly, as seen in Hong Kong and Thailand, there is room for local value for money players such as S&P and Cafe de Coral. Especially during the current cost of living crisis, these operators are thriving.

Second are the apps that are driving payment and reward onto stand alone apps such as Kopi Kenangan and Starbucks in Singapore.

The other key observation is yet another example of the consumer behaviour in the capital city not being indicative of the behaviour in the provinces and second tier cities.

Do you have data ready to set your 2024 digital growth targets?

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Message me at Michael@eureka.ai if you are interested in how your competitors are performing in Hong Kong, Singapore, Malaysia, Indonesia or Thailand.

You can also connect with me on linkedin here Michael Hawkins