Grab & Gojek’s Food Delivery Business Has a New Competitor
Pandemic Coronavirus Disease 2019 (Covid-19) not only brought disruption but also an opportunity, especially for the food delivery business. The map of business competition in this sector has become more dynamic as well as increasingly ‘fierce’.
The pandemic that has lasted more than six months has forced everyone to stay at home. As a result, there is a significant shift in consumer behavior. One of them is the increase in demand for online food ordering and shipping.
The food delivery service business is excellent when a pandemic is considered safer for consumers because they do not have to visit locations or restaurants to minimize the possibility of contact which can increase the rate of infection.
As a result, players in this sector such as Gojek and Grab are flooded with orders. Quoting The Asean Post, when Malaysia implemented a lockdown known as the Movement Control Order (MCO), some food delivery companies experienced orders increases of up to 30%.
Seeing this opportunity, many parties did not want to be left behind to take advantage of this momentum. One of them is Thailand’s oldest bank, Siam Commercial Bank, which reportedly recently expanded its wings to other businesses to support food delivery companies through venture capital.
Reporting from Nikkei Asia, Monday (07/20), business diversification was carried out to defeat the two giant ride-hailing (sharing a ride) of Southeast Asia.
Siam Commercial Bank Invested in Synqa Startup
Previously, Siam Commercial Bank had been preparing to expand into new fields with a special focus on digital services. June 2020, Siam Commercial Bank reportedly funded a Thai startup, Synqa.
Subsequently reported by Reuters, Siam Commercial Bank became one of the investors who provided funding to the Synqa payment startup along with other investors. Synqa was formerly called Omise, a Bangkok-based payment gateway that was founded in 2013.
Not only Synqa, but the oldest bank in Thailand is also investing in other startups that are on the rise, including Gojek, which will later become a competitor in the food delivery business to be launched. There is also a blockchain company based in the United States, Ripple, which is a digital transformation strategy.
Siam Commercial Bank spreads its wings to other businesses to support this food delivery company through venture capital. The new company will integrate thousands of restaurants into their app (called Robinhood app) by the end of 2020.
Arthid Nanthawithaya, the Bank CEO said that they will create a sustainable ecosystem for food delivery in the country.
Helping Restaurants in the Middle of Pandemic
It is undeniable when the pandemic as now the demand for food delivery services in Gojek and Grab recorded a dramatic increase. This service helped the restaurant operate during the Covid-19 pandemic, mainly due to a ban on eating on the spot. However, both charge an additional 20-40% fee for each order.
But the new service from Siam will also waive the commission fees. Restaurants will receive the money one hour after sending using digital bank services. This offer is much faster compared to Grab, where restaurants have to wait for about a month.
The Head of the Service Unit Srihanath Lamsam said the new service was designed to help restaurants affected by Covid-19. However, the oldest bank’s biggest interest is also in the potential for large new loans through this new application.
“People started to use digital services because of the pandemic,” Srihanath said. With this breakthrough, Siam Bank has crossed the traditional line of the banking industry in general, to reach new customers.
Moreover, many people are turning to digital services because of Covid-19 pandemic. Siam Commercial Bank is also the fourth-largest lender by the asset, and chooses to enter one of its core business areas and is expected to take advantage of new opportunities for loans.