A surge in online orders of fried chicken and pizzas during Ramadan has provided relief for south-east Asia’s two biggest technology start-ups, whose main business of ride-hailing has been badly hit by the coronavirus pandemic.
The Muslim holy month of intense prayer, dawn-to-dusk fasting and nightly feasts — which drew to a close over the weekend — is usually a period of peak demand for Indonesia-based Gojek as people travel, celebrate and buy gifts.
But the company, along with Singapore-based rival Grab, has been hit hard as customers stay at home during the health crisis. Like US peers Uber and Lyft, neither have yet made a profit.
Indonesia is a critical market for Gojek and Grab but the world’s fourth most populous country has struggled to contain its outbreak of Covid-19. It recently reported its biggest daily rise in new infections.
Grab, valued at $14bn and backed by Japanese tech group SoftBank, has asked employees to consider fewer hours or accept unpaid leave. Gojek, valued at $10bn, said it has been “adversely impacted”. Senior executives at both have taken temporary pay cuts.
The pandemic has encouraged Gojek to shift focus to meal deliveries, said Catherine Hindra Sutjahyo, the company’s chief food officer. “With resilience in online commerce amid the pandemic, there has been an opportunity for us to solve new daily challenges,” she said.
That includes options for merchants to sell easy to prepare, “ready to cook” meals and enabling family members to send each other food as gifts.
Gojek recorded a 10 per cent jump in meal deliveries in Indonesia between late April and the beginning of Ramadan in early May, the company said.
Grab said merchants on its app reported a double-digit increase in orders during Ramadan compared with last year.
That included a record 4.2m servings of fried chicken in the first three weeks of the religious festival, the company said.
Customers include Jakarta resident Ainun Chomsun, who through Gojek’s app had fried chicken and pizza delivered to her nephews living nearly 500 kilometres away in central Java.
“This is the first time in 46 years that I have not been able to spend Eid with my family in my hometown. I wanted to find a way to celebrate with them,” Ms Chomsun said. The festival of Eid al-Fitr marks the end of Ramadan, with millions flocking to their hometowns to celebrate with family.
The trend underscores the growing importance of food delivery globally for ride-hailing groups.
Uber earlier in May approached Grubhub about a takeover that would create the biggest meal delivery company in the US. Lyft has launched a delivery service to meet demand for essentials such as groceries.
“Food is giving [companies] an additional stream of business which could be as big as rides,” said Sirajudeen Mohammed, a Singapore-based managing director at Accenture who specialises in digital commerce. He added that Gojek was seeing spikes in orders of as much as 450 per cent on its app during fast-breaking time.
But “I don’t think that spike [in food] can compensate for the loss in rides”, Mr Mohammed added.
The region’s restaurant industry has been severely hurt by the pandemic, which has had a knock-on effect on food delivery services. Zomato, one of India’s biggest food delivery companies, in May said it would lay off workers and forecast that the number of restaurants in India would shrink by 25 to 40 per cent over the next six to 12 months.
But in Indonesia at least, some traditional food businesses are adapting to the new realities posed by Covid-19. Dapur MTW, a family-run restaurant business in Jakarta, experienced a tripling of orders through Gojek during Ramadan thanks in part to its “family-size” meals that can last up to a week and be frozen.
“I am not sure things will get back to normal anytime soon. We just want to adjust to this whole situation” said Tiwuk Rayie Larasati, restaurant owner
Reference: Financial Times
