Analysis: Facilitating the Gradual (yet Dramatic) Changes by COVID-19 in Consumer’s Food-based Purchasing Behaviors

April 19, 2020

The transmission of COVID-19 is rapid, leading plenty of nations to implement social distancing, with some have even elevated it to lockdowns. With the government's instruction to eat, pray and work from home, leading consumers to avoid public places, limit time during shopping, and curb it for only necessities. This has consequently - and indomitably, altered consumers shopping behaviours, and developed a new normalcy for both consumers and brands – product and/or service providers. When they are not out of their homes shopping for daily necessities, they resort to – thank technologists, online platforms. Downloads and revenue conversions of e-commerce websites, food delivery platforms, online gaming, and streaming services have grown exponentially in the past months, and the growth precipitation is projected to stay consistent, if not improve in near future. In repercussions, the revenue decline, or even closures of traditional brick-and-mortar outlets are natural, and brands have now been conditioned to intensify strategies of products and services provisions to consumers, in reaching those who reside outside the urban areas and of various demographics.

The growth of online-based platforms for products and services

Citing a research done by YouGov in Indonesia commencing February to March 2020, 80% out of 2,500 Indonesian respondents are afraid of contracting COVID-19. In addition, the growth of the virus in Indonesia ever since the first confirmed cases on March 2, 2020 has been rapid. As of now, it has exceeded 1,500 confirmed cases and more than 100 deaths, making Indonesians to surely grow more and more cautious towards the virus distributions in the country.

Inevitably, they begin staying at home, growing higher attachments to online activities, including shopping for food and beverages, groceries, home products and other platforms’ in-app products. Following the spread, a China-based e-commerce website, for instance, observes the sales of common household staples quadruples this year, compared to the same period last year.

Figure 1: The changes of organic downloads in Indonesia between January to March 2, 2020, by AppFlyers Asia Pacific in Eisya E of The Jakarta Post's article.

Although both gaming and shopping platforms’ number of organic downloads have declined, the number of in-app purchases have, in an opposite manner, increased. In other words, existing active users are increasingly more and more active on the app themselves, spending time there and utilizing them to either play games or purchase products or services.

Meanwhile, this behavior is not only evident in Indonesia. According to AppFlyers, who has collated data across Indonesia, India, South Korea and Japan, users in four countries have shown similar shopping behaviors, showing a whopping nearly 50% on food and beverages platforms.

Figure 2: Collation of in-app purchase growth in Indonesia, India, South Korea and Japan between January to March 2, 2020, by AppFlyers Asia Pacific in Eisya E of The Jakarta Post's article.

While food and beverages, shopping and gaming’s in-app purchases have increased, it is only habitual for travel websites to have lost their active users and revenues between the mentioned period. The natural decline is due to COVID-19’s rapid spread and lockdowns of countries, leading users to cancel or postpone their travel plans.

Strategies by food-tech brands in Indonesia

As mentioned, online-based product and services platforms have seen a spike in downloads and revenue for the past months in 2020. With the projections of growth, many platforms have built new rules in their playbooks to help curb COVID-19 spread during delivery and/or takeaway processes.

Gojek and Grab as food delivery platforms

Grab and Gojek, two delivery tech moguls have released a series of actions to help curb COVID-19 spread. Collaborating with government bodies, both competing apps are regularly communicating the latest industry safety and hygiene standards, while providing a 24/7 contact for users and merchants. Furthermore, Contactless Delivery, Contactless Payment (via OVO) and GrabFood pick-up services, on platforms distanced two meters between courier/merchant, and courier/user have been implemented.

On the courier’s side, both decacorns have distributed face masks and hand sanitizers across the region, while educating couriers to regularly maintain their health and getting their health checked when the remotest symptoms are shown. Meanwhile, Grab takes it to the next level by the temporal suspension of the accounts of couriers with the remotest symptoms. Suspension will be lifted when the couriers have delivered medical certificates, which states that they are free from COVID-19.

Figure 3.1: Courier’s and Merchant’s health measures

As for the merchant’s side, both Gojek and Grab support local and independent merchants, in keeping their kitchens and employees clean, and displaying their listings, easily-accessible to users on the top of their apps’ landing pages. Gojek elevates this to another level, moreover, with the Hari Kuliner Nasional (National Culinary Day), whereby collaboration with local merchants is implemented, along with high discounts for users. In comparison with this, Grab has offered similar output - discounts for users. Both platforms have built a conducive environment for all of their apps users here during the working-from-home environment; the courier gets to retain their jobs while staying healthy, continuation of businesses for local and independent merchants, and most importantly for users, the interesting discounts have undeniably increased in-app purchases, hence, improvement in both downloads and active users. Gojek’s co-CEO has recently announced that they have received 5,500 extra app downloads ever since the working-from-home regulation was implemented by the government.

Figure 3.2: Grab and Gojek’s curation to support local, independent merchants

On a side note, Grab has recently launched GrabHealth, powered by The Good Doctor; a collaboration with Indonesia’s Ministry of Health for online screenings, a way to ease and improve the detection of COVID-19’s early symptoms. Grab users will be able to converse with certified doctors behind the service for free.

Meanwhile, another Asian food delivery mogul, Zomato, who recently acquired UberEats in India, Zomato collaborates with restaurant partners to improve food handling and packaging – as mentioned above by World Health Organization’s, while training Zomato Valets to regularly wash hands using soap and hand sanitizers. The valets are given guidance on potential symptoms of COVID-19 and medical assistance when symptoms occurred. Just as it is in Southeast Asia, Zomato has as well been applying Contactless Delivery. Only available for prepaid orders, delivery executives, or Zomato Valets, will leave ordered food packages on a clean surface – varying as a table or a platform outside the door, followed by capturing and sending a photo to the ordering user. The method is applicable on both food for users and Hyperpure (grocery) orders for merchants. As a result, Zomato has received a mandate from the Indian government - who has recently executed a 21-day country lockdown, to commence online grocery delivery nationwide, which will most likely improve their downloads, active users and eventually, revenue.

Zomato as a food aggregation platform

Talking about Zomato, as a restaurant aggregator platform in Indonesia, it has started with releasing tiles indicating restaurants who offer in-house and third-party deliveries, as well as taking away service, under tabs called Takeaway and Delivery in all regions, where users are able to click to access those restaurants. Next, Zomato as well applies best practices of the World Health Organization (WHO)’s hygiene regulations on restaurant’s listings.

Figure 4.1: World Health Organization’s health advisory

Figure 4.2: Contactless Delivery method in operating regions, i.e. India's cities and Dubai

Many restaurant partners have as well opened up in-house or third party delivery options. In regards to this, Zomato Indonesia has invited restaurant partners whose kitchens are operational, consequently, the provisions of delivery and/or takeaway services of their outlets. A series of curation has been created on the platform, free-of-charge to the restaurant partners, to support their businesses in this difficult time. Zomato users are able to view those restaurants that offer delivery and takeaway services here. Though Indonesia is not a region in which Zomato delivers, users are able to refer to the platforms for their honest ratings and reviews, given by food bloggers, or foodies, as Zomato refers to them. The users are then able to move on to Grab and Gojek for deliveries.

It is an understatement to say Coronavirus has changed media buying, which has long been complicated on tech platforms. Previously, the set-and-forget campaign, for instance, has a lower chance to persuade revenue-generating conversion of consumers due to stocks limitations and uncompetitive price points, however, it has changed now. The combination of supply and demand shocks of Coronavirus has built a highly-complex and faster-moving environment for tech-based businesses. Users will most likely search on various e-commerce/delivery platforms to obtain desired products, regardless of uncompetitive price points. Hand sanitisers, for instance, e-commerce vendors manage to sell them at price points higher than normal, hence businesses whose main proposition is solely that are likely to survive. Without advertisements, their set-and-forget campaign has a higher chance of being successful compared to before.

Meanwhile, Grab, Gojek and Zomato Indonesia, whose main business proposition supports revenues for local, independent businesses, are required to be constantly aware of the latest news on food and beverage, as well as basic necessities, which drives merchants and consumers’ behaviors regionally. In this case, Zomato Indonesia, whose main proposition is on advertisement technology, has created an environmental-conscious curation on the platform, which will surely be a long-term investment between themselves and their clients, but most importantly, their active users. Grab and Gojek, moreover, have moved on to be a necessity for many Indonesians, and having the two of them in the tech-based delivery ecosystem will not only change the game for many brick-and-mortar outlets, however, it will also improve their ways to reach out to their digital users - which further improves and complicates the necessary digital media buys.

In the future, should staying-at-home and online-based activities become the new normal for consumers – with restriction in going out, the three tech moguls have created a conducive environment for the development of cloud kitchens and takeaway-only restaurants, supplemented with solid online presences and advertisement placements. In other words, Coronavirus has constructed a new normal for technology-based food deliveries, their media buys and creative content conceptions for them, in repercussions, a new consumer’s purchasing behavior has been formed. Along with it, Gojek, Grab and Zomato have developed a long-term habitat for the growth of possible positive changes.

It will only get easier, though.



Bibliography:

The Jakarta Post

Big Commerce

Business Insider India

Zomato's Instagram

Grab

KataData