How Covid-19 Popularized Food Delivery in Hong Kong

How Covid-19 Popularized Food Delivery in Hong Kong

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Hong Kong restaurants COVID-19 profits down

Volatility in Hong Kong's F&B Industry Began Before COVID-19

Hong Kong's F&B industry has been seeing instability since 2019, well before the Coronavirus became known on a global stage. This unstable environment planted the seeds for delivery to begin to appear as a viable substitute to eating out. It also gave restaurants a secondary source of income since fewer people were eating out. We can see that as early as May 2019, total restaurant receipts and purchases began to see a gradual downward slump. 

Just when it seemed that people were beginning to return to restaurants around November and December of 2019, that momentum was cut back drastically by the arrival of COVID-19. We can see a sharp decline in the total restaurant receipts and purchases just after January 2020. Considering that Hong Kong's first case of COVID-19 was confirmed in early February, it is reasonable to assume that this is the reason for the sharp drop in people eating out around February of 2020. Fortunately, we begin to see an upward trend from April to June. This is possibly because restaurant owners began to see the value in offering delivery options alongside their dine-in offerings. 

2020 vs 2019 HK restaurants profit statistics

How Badly Did COVID-19 Hit Hong Kong's F&B Industry?

If we compare the value of total restaurant receipts and purchases in 2020 with those of 2019, we can see just how dire the situation in 2020 is. Given that 2019 was already a volatile time for Hong Kong's F&B industry, 2020's numbers put into perspective how tough things have been for restaurants in Hong Kong lately. 

Value of total restaurant receipts Q2 2020 vs Q2 2019: Down by 25.9%

Value of total restaurant purchases Q2 2020 vs Q2 2019: Down by 4.7%

Value of total restaurant receipts Apr, May, Jun 2020 vs Apr, May, Jun 2019: Down 37.9%, Down 24.4%, Down 15.7% respectively

Food delivery graph Hong Kong

The Positive Correlation Between Searches for Food Delivery and Restaurant Revenue

Using Google Trends, we can pinpoint the instances where Hong Kong searches for food delivery companies spiked. According to the data presented, we can see searches for food delivery beginning to see a slight increase around November in 2019. However, we can see a stronger upward trend beginning around February, 2020, which coincides exactly with the arrival of the Coronavirus in Hong Kong. 

This shows clear interest in food delivery as the virus began to spread throughout Hong Kong. Interestingly, we can see that in November, the F&B industry in Hong Kong saw a positive uptick in the number of restaurant receipts and purchases. This correlates exactly with when interest in delivery companies saw its first spike. After that, we can see that interest in delivery companies really began to peak around April and May, 2020. Again, we can see that around this time, there was a definite upward trend in the number of restaurant receipts and purchases compared to previous months in 2020. 

Popularity of food panda, deliver, grub hub in Hong Kong 2020

Hong Kong Delivery Companies See Incredible Growth During Pandemic

With the need for new ways for restaurants to do business, delivery companies have seen a rapidly-growing list of restaurants signing up for their services. There are a number of reasons why restaurant owners have turned to delivery to supplement their dine-in business practices. A few of these reasons include:

1. Strict social distancing measures causing lowered restaurant capacity and fewer customers

2. Work from home policies, which took away a lot of lunchtime business

3. Government restrictions on restaurants' operating hours and capacity

4. Convenience of food delivery given people's reluctance to go to crowded locations

5. Contactless method to browse, order, pay and receive food

Hong Kong's big three delivery companies have all seen growth. Food Panda has increased its restaurant partners to 7,000 and has seen demand for its services increase by  80%. Deliver has now procured 6,500 restaurant partners and saw a 60% order volume increase in January of 2020. Uber Eats has also seen an increase in its reach as it now has 2,500 registered restaurant partners. 

Statistics on Hong Kong public using food delivery

Hong Kongers are now Embracing Delivery

We can see that more and more Hong Kongers now see delivery as an enticing alternative to eating out. A recent survey shows that over 60% of participants order delivery at least once a week, if not more. Curiously, in the survey, not a single participant had never ordered delivery before. This is a marked difference to just a year or two ago where delivery wasn't really viewed as strictly necessary by Hong Kongers. 

We can also see that Hong Kongers are willing to spend a good amount of money for their delivery orders. Another survey shows that 60% of Hong Kongers are willing to spend more than HKD100 on delivery orders.

With a clear upward trend in demand for delivery options among Hong Kongers, it has almost become mandatory for Hong Kong restaurants to offer delivery so that they can benefit from a second revenue stream and offer their customers the convenience they are now starting to expect. 

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