The Growth of Home Delivery Solutions

The Growth of Home Delivery Solutions
April 13, 2020

As Malaysians go through the second and intensified phase of the Movement Control Order (MCO) to flatten the curve for Covid-19, many are adapting to the new normal by embracing home delivery services to support every facet of daily life.

Online food and grocery providers, in particular, are seeing an uptick in customer demand in the last few weeks, across the board, from the biggest players such as Grab and Foodpanda, to new market entries such as MyMarket and SeaFresh.

MyMarket business owner, Sarah Salim, described to the Star an increase in demand: “In one day, we can do around 50 to 200 deliveries.

“I would say the delivery rate has increased up to 30 percent due to Covid-19 as more people choose to get their groceries delivered to them instead of going out.”


Growth due to tech

Consumer delivery services had already been expanding rapidly in the last few years prior to the global pandemic, creating the foundations to scale up relatively easily once the MCO was announced.

The home food delivery market in Malaysia was already worth just over US$66.3 million (RM288 million) in 2017, and was projected to reach over US$319.1 million (RM1.390 billion) by 2026, at a compound annual growth rate of 19.2 percent.

Such phenomenal growth is also fueled by the country’s high internet penetration rate of 85.7 percent and the increase in smartphone usage for internet access of 97.7 percent as of 2018, with users keen to access a wide range of services conveniently through mobile apps and search engines.

This is bolstered by the development of more robust and secure e-commerce platforms making payments more convenient and seamless. Government efforts such as the Digital Free Trade Zone and Bank Negara’s regulatory sandbox framework, alongside tax incentives for Venture Capitalists and SMEs have all contributed to creating an ecosystem that fuels diversified offerings in this space.

Today, Malaysian consumers can receive anything they can think of right to their doorstep with just a couple of clicks, whether it be groceries, meals and clothes, or even ordering a handyman and runner services through providers such as GoGet, Easy Parcel and Lalamove.

Francesca Chia, the co-founder of GoGet, an on-demand work app where trained part-timers carry out menial tasks, explained their business model to online publication Generation T: “Our goal is to create a new way of defining work, and to connect the city to become a more efficient place.

“Business owners and their operations can now leverage reliable part-timers around the city to work.”


Innovating to meet challenges

The success of delivery apps, online shopping and e-commerce has also laid the groundwork for innovative solutions in the face of restrictions during the MCO. These solutions are likely to go beyond temporary band-aids, and could be modified into more permanent services in the future. 

With traditional logistics buckling under extraordinary circumstances, Lazada, for example, has stepped in to help Cameron Highland farmers sell their produce through its online marketplace, when the latter was facing the threat of letting tonnes of vegetables go to rot. Beyond helping farmers avoiding wastage and loss of income, the company has expanded supply chains and product offerings, transforming the way consumers purchase fresh produce, possibly for good.

The surge in home deliveries due to Covid-19 is also placing delivery workers at far greater risks of infection. Sensitive to the risks, Grab has recently introduced contactless delivery, which minimises physical contact between the public and its drivers, who are referred to as delivery partners. Customers can include a note to their Grab delivery partners detailing where to drop off their food and items securely for them to pick it up at a later time. The company has also made all payments 100 percent cashless through GrabPay to further reduce interactions.