The fifth wave of the pandemic has caused severe service disruption for brands in Hong Kong. According to figures from the University of Hong Kong, Hong Kong had a total of 56,827 confirmed cases on 3 March, the highest number since the outbreak of the latest wave. In mid-March, chief executive Carrie Lam also predicted that about 300,000 Hongkongers were undergoing home isolation or quarantine, leading to many businesses in Hong Kong facing staff shortages as patients and their close contacts were required to stay at home for 14 days.
With a very limited number of available staff, many brands in Hong Kong had to reduce or adjust services. Although many brands have been strengthening their offerings in eCommerce, the lack of available staff unavoidably impacted their business. For example, in early March, as the Hong Kong government was planning to roll out city-wide testing, citizens flocked to supermarkets to snap up fresh food and necessities. Coupled with the rising number of confirmed COVID-19 cases in the city, many brands were facing staff shortages and had to reduce service offerings, adding more pressure to the city's supply chain.
While many were flocking to supermarkets to buy groceries, others have turned to eCommerce platforms to avoid the crowd. However, with the shortage of manpower, this too has turned into a futile attempt. HKTVmall, which has earned the reputation of being able todeliver products within two days of order, struggled with the shortage in manpower and extended its delivery time to two weeks. It also began recruiting couriers with attractive pays to help deliver the orders and working with restaurants in Hong Kong to roll out more temporary self-pickup stations.
HKTVmall's delivery services gradually resumed normal in mid-March. On its Facebook page, the eCommerce platform said about 70% of its orders can now be delivered within five days, and about 50% of orders can be even delivered within three days. In addition, it was working with 55 restaurants in the city as temporary self-pickup stations, negotiating with 255 stores as of 14 March.
MARKETING-INTERACTIVE has reached out to HKTVmall for more details about its plan to maintain its services and how the pandemic has impacted its business and eCommerce growth, but the company replied that due to its annual results announcement on 30 March and therefore, it declined to comment on its business during the blackout period.
Delivery platforms pivot and offer more services
Apart from HKTVmall, both foodpanda Hong Kong and Deliveroo Hong Kong also heavily rely on its couriers to help deliver food and groceries. A spokesperson from foodpanda Hong Kong said the number of couriers available for delivery decreased amid the fifth wave of the pandemic, since some preferred staying at home out of precaution and others fell sick. Speaking of the disruption, the spokesperson said, "With government restrictions on restaurants’ dine-in ban, as well as changes to restaurants and retail shops operating hours, we had to work closely with vendors to ensure that we provide the most updated information to customers, adjust manpower and resources to meet supply and demand, as well as work to comply with and support all our stakeholders with regards to COVID-19 precautionary measures."
To maintain its business, foodpanda Hong Kong worked closely with vendors to reinforce educational tips and share the various services that foodpanda Hong Kong could provide to optimise merchant menus, acquire new customers, and increase basket size using growth tools. The company also strengthened its partnership with non-vendors. These companies can choose to use pandago, foodpanda Hong Kong's on-demand courier service to deliver orders generated from other channels such as phone calls or social media. Being able to offer a stable service is crucial to eCommerce platform's business, and foodpanda Hong Kong said it uses technology to better allocate its resources. The company boasts a live system that maintains courier supply and demand equilibrium, and this is adjusted on a daily basis depending on different internal and external factors, which includes considerations such as government restrictions.
During difficult times, foodpanda Hong Kong also rode on customer sentiment to help drive its business. In response to government restrictions, foodpanda Hong Kong subsidised various deals and discounts, such as pandapro's HK$1 limited-time subscription fee, upgrading its pandapro subscription plan to offer unlimited free delivery services, as well as offering up to 40% off on our self pick-up service.
"We hope that these offers will help to drive further customer demand, with hopes to bring more orders for our couriers as well as our restaurant and shops partners," the spokesperson added.
Deliveroo Hong Kong has also been expanding its business, launching multiple Editions sites across the city. It opened one Editions sites at Tseung Kwan O last December, home to more than 400,000 residents as the company hopes to tap into the growing population in the area. In 2021, the company opened four new sites at Cheung Sha Wan, Kwai Tsing and Tuen Mun, in addition to the latest location at Tseung Kwan O. Andrew Hui, general manager of Deliveroo Hong Kong said, "Edition kitchens are an essential part of Deliveroo’s offer to restaurants. These sites offer restaurants an opportunity to expand business at a lower risk. Restaurants can utilise Deliveroo Hong Kong's insights to identify locations with the desired customer demographics as well as customers' preferences. Expanding through Editions also carries lower cost than traditional brick and mortar premises."
Undoubtedly, the future of Hong Kong's eCommerce is fraught with challenges and opportunities. To better understand the local market, Deliveroo Hong Kong has been conducting surveys to study both restaurants and diners, uncovering the trends in the city's F&B sector. According to its latest Restaurant Confidence Index, the overall confidence for Q4 2021 dropped significantly to just 27%, a drop of more than 40 percentage points, as many restaurants in the city were no longer optimistic about the economy or the F&B industry, likely due to the adjusted opening hours during the Chinese New Year period and beyond.
In late February, Deliveroo Hong Kong also announced the results of the Share of Stomach report. Respondents in Hong Kong said both mental and physical health were their top concerns, leading to the increasing appetite for food delivery among consumers. With the city grappling with social distancing measures and dine-in restrictions, 71% of respondents agreed that the food they eat plays an important role in their mental health, followed by 65% who said they wish to take control of their nutrition levels.
A Deliveroo Hong Kong's spokesperson said, "We remain committed to helping our restaurant partners tap into the growing market of food delivery. Our operations team has been closely monitoring the operational performance of our delivery network and using data analysis results to match supply with demand."
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