Tech Is Killing F&B

Before the pandemic, there weren’t many choices when you wanted to order delivery. There were of course the ubiquitous pizza delivery services, joined later by the fast-food giants.

But by and large, many restaurants didn’t offer delivery services. Most didn’t even offer takeaway – they didn’t have containers. Even if they did offer takeaway, it was a cumbersome process of phoning them, figuring out a paper menu, and paying for your food using cash – exact change please.

In the mid-2010s, food delivery apps began to emerge. At first, they focused on acquiring restaurants and customers to reach critical mass. They bled cash, giving away promo after promo to entice customers, while charging restauranteurs minimal commissions. But that didn’t matter to their venture capital backers – capturing market share is only the first step towards profitability down the line.

SATURATION POINT When the pandemic hit in 2020, F&B operators were hit with a crisis unlike any other before. Strict prohibitions against dine-in meant that cash flow evaporated overnight. Restauranteurs were forced to find other sources of income, and that naturally meant delivery services.

And the delivery apps were more than happy to oblige. They fed stakeholders their mission, which was ostensibly to bridge the gap between restauranteurs and customers, thus ‘saving local businesses’. They also painted themselves as pandemic saviours – enabling cashless delivery and encouraging people to stay at home and order food.

But the truth is, the urban food delivery market has already reached saturation. The lines have already been drawn between the delivery apps. Now, instead of focusing on market share, they are focusing on profitability.