INTERNATIONAL JOURNAL OF PROGRESSIVE RESEARCH IN SCIENCE AND ENGINEERING, VOL.2, NO.4, APRIL 2021.

Revenue boom of Online Food delivery industry amidst Pandemic:

Evidence from the Philippines
Christy O Gamilla1
1
Institute of Graduate Studies, San Sebastian College Recoletos, Manila, Philippines.
Corresponding Author: co.gamilla@sscrmnl.edu.ph

Abstract: - Eating out in our favorite restaurants is one of the things we enjoy doing. It can be our way of connecting to others, try
some new dishes, and celebrating important events with family and friends. Although dine-in is currently close as preventive
measures to the COVID-19 virus, they can still operate take-out or delivery option so that people can still order their favorite comfort
food and eat at home style. The health crisis brought by the novel coronavirus force millions of people to stay at home, food delivery
demand has risen to prominence. According to StockApps.com, globally the online food delivery market is expected to hit $151.5bn
in revenue and 1.6bn users in 2021. It is expected to reach almost two billion globally in the next three years. Consumers turned to
online food delivery as alternative to buy in stores and restaurants. The online food delivery is keeping the food industry alive, by
trying to mitigate food business from shutting down.

Key Words: — coronavirus, delivery, dine-in, comfort.

I. INTRODUCTION or either to a person’s place of work, and up to today there are

about 5,000 of them in India are still active food delivery
The COVID-19 pandemic poses threat to most businesses and dabbawalas to deliver over 200,000 lunchboxes to workers
the global economy. The Philippines is no exception. Early last across the country. In the US, the food delivery set its foot in
year 16th March 2020 following the increase in the number of 1950’s, many of the middle-class American enjoys stay at home
confirmed COVID-19 cases throughout the country. A strict to watch TV and eat at home. Restaurant started to lose
home quarantine has been observed during the ECQ; hence business; In turn they offer delivery service to adapt to the
movements are extremely limited, only those private essential middle-class lifestyle which they also use the Television to
establishment providing necessities shall remain operational, advertise their menus. According to Time and the New York
and the rest are close for business while the government Times the restaurant who adapt this change and offer delivery
lockdown is implemented. services boosted their sales up to 50%.
The food delivery service made its mark crucial during this In 2010 the first local service delivery was developed which
global pandemic situation, it is the foremost savior of the food allow consumer to order online or hotline from various
industry. A little history about the food delivery beginning was restaurant in Metro Manila, However, it was later acquired by
first recorded from Italy in 1889, this is when King Umberto app-based food delivery service Z company which arrived in
and Queen Margherita called upon chef Raffaele Esposito to 2014. The Mi Company branched out into food delivery in
deliver pizza to them at their palace in Naples. After that in 2018, while the youngest online delivery apps arrive in 2019.
1890, an Indian named Mahadeo havaji Bachche also introduce
and develop a company for delivering home-cooked lunches to II. STATEMENT OF T HE PROBLEM
workers within the city of Mumbai. This idea is called
dabbawala food delivery, dabba means a round metal box used The food delivery business is an independent company that
to transport hot food either from home or from restaurant, delivers food to customer’s right at their doorstep. Because food
is essential, therefore food delivery is in demand to keep
consumer stay at home while enjoying their favorite food.
Manuscript revised April 23, 2021; accepted April 24, 2021.
Date of publication April 25, 2021. During the pre Covid-19 days there are sufficient food delivery
This paper available online at www.ijprse.com companies, however when lockdown restrictions is imposed
ISSN (Online): 2582-7898
demand has double or even more.

CHRISTY O GAMILLA: REVENUE BOOM OF ONLINE FOOD DELIVERY INDUSTRY AMIDST PANDEMIC:
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EVIDENCE FROM THE PHILIPPINES
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While many restaurants and fast-food chains worldwide are hit conditions. Thus, labor unions are calling the government to
by the pandemic, the convenience in ordering food via online review the current labor standards for delivery riders considered
food delivery apps has helped alleviate the revenue situation of as front liners who had really played an important role during
the food & beverage industry. this pandemic.
This study is to enlighten how significant is the food delivery
IV. COURSES OF ACTION
service in aiding the food establishments to adapt to the “new
normal”, expanding take-away and delivery services, and in
The pandemic is not slowing down, according to reports it is
accelerating sales utilizing digital channels.
accelerating in many countries. While People are stuck at home,
they turn to ordering online for their lunch packs, snacks and or
III. CAUSES OF T HE PROBLEM
simply food cravings with just a few clicks in their gadgets,
A. Pandemic Food Sanitation and Protocols smartphones, and laptop they can just have their food deliver in
their homes. Thus, these companies with growing demand and
More than a year had pass since the World Health Organization
competition in the industry needs to invest in upgrading and
declared COVID-19 a pandemic. People are still confined at
enhance their services offered. Innovation with new
home, aged below 18 years old and 65 years old above are technologies like deep learning and machine learning is one
strictly banned from going out since they are high risk in
good digital transformation they can do. The food delivery
contracting the novel coronavirus. In general, people are companies also need to prioritize a secure and simplified
mandated to stay at home while the state is under community
payment methods. Easy, secure payments online will gain huge
quarantine. All companies shift to work-from home set up.
trust from consumers.
Thus, this hit the food industry from banning people avail food
from restaurants, food chains inside the malls. Growing food The digital technology enables the food delivery companies to
delivery companies had partnered with many food efficiently accommodate high volume of orders. Since the
establishments during pandemic and together with charging market is extremely competitive and there are many new
minimal service fees brought the convenience of buying lunch, companies in the food delivery industry, maintaining brand
snacks and or food packs delivered to your doorstep. loyalty user experience is particularly important to keep
consumers within its fold.
B. Demand and Supply
As the competition is evident affecting its operational growth,
Internet penetration in the Philippines stood at 67% in January
the food delivery companies will have to invest and turn its
2021. Thus, quick access on gadgets, smartphones, easy focus to Research and Development to develop, integrate the
payment, and simplified banking system result to increase in latest trends and recent IT applications in the food delivery
online food delivery orders and purchases. Food delivery industry, to bolster and sustain their competitiveness.
companies are collecting minimal delivery fees for
The Mi Company is the most popular food delivery apps in the
transportation and convenience cost. The fees collected are
Philippines, they operate 24/7 in most areas in NCR and NCR
reasonable enough to cover the rider fuel and its miscellaneous
plus region. They are known for their speed and less delivery
expenses. In most, cases the actual transportation fare is even
time since only caters and recommend restaurants near you. But
more expensive when you personally buy to the mall or
recently they have added long-distance delivery to be able to
restaurant to pick up your order, thus this will also endanger generate greater network, thus accommodating high volume of
your health risks and heighten possible chances of contracting customers.
the virus.
C. Labor Issues V. CONCLUSION
The growing demand of food delivery apps explodes the
The COVID-19 health crisis had made many restaurants and
revenue of the industry during this pandemic. The companies
fast-food chains close for business. However, some only shut
hire and employ delivery app riders which is categorize as
down their dine-in service but remains open for drive-thru and
independent contractors or consider these riders as their
delivery services. The market for online food delivery services
business partners. Hence employers are exempted to provide
had tripled its revenue last year. Mi Company is one of the
minimum wages, healthcare benefits and other working

CHRISTY O GAMILLA: REVENUE BOOM OF ONLINE FOOD DELIVERY INDUSTRY AMIDST PANDEMIC:
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leading food delivery company in Asia Pacific that reported the Takeaway, and Sustainability—What's A Good Compromise?
company’s net revenue increase by 70% in 2020. In addition, | Tatler Philippines (asiatatler.com), Aug 11, 2020.
they have also achieved their growth and profitability targets. [8]. Mai Ono, Top 10 Best Food Delivery Apps in the Philippines
2021 (GrabFood, Foodpanda, and More), Mar 22, 2021.
While in the middle of the pandemic, consumers turned to e- [9]. MetroStyle, App grades, The 7 Best Food Delivery Apps in
commerce technology from physical to online purchases. Metro Manila | Metro.Style, Apr 24, 2021.
People also realized how easy it was to get their food delivered [10]. National Restaurant Association, New research details early
to their homes without risking health safety. Technology impact of coronavirus pandemic on restaurant industry, Mar
innovation will play a huge part in sustaining the food delivery 25, 2020.
industry by adapting to the growing demand of consumers. [11]. Patricia Baes, A Short History of How Food Delivery Came to
Be, Mar 25, 2020.
[12]. Robert Kazmi, Food Delivery Apps: Future Trends, The Future
VI. RECOMMENDATION
of Food Delivery Apps (koombea.com), Mar 3, 2021.
[13]. Sam Sinha, What's the future for delivery and online ordering
The food delivery industry is rapidly experiencing growth in
in 2021?, Dec 7, 2020.
revenue globally. Online food delivery is heaven’s answer to [14]. William B. Depasupil, DoLE urged to protect delivery app
restaurant and food chain business during this pandemic, so riders, DoLE urged to protect delivery app riders – The Manila
they have easily adapted to health and safety measures. Times, Nov 20, 2020.
Technological innovations like deep and machine learning have
continuously transformed to make its apps easier to use by
consumers. The food delivery companies will have to improve
its payment channels to secure online payments from fraudulent
activities, thus this will assure customers to avail of contactless
payment modes.
Investing to research and development will keep the food
delivery companies abreast to recent trends in IT applications
in the food delivery industry. User experience is incredibly
relevant to gain consumer trust and loyalty.

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