Deliveroo has partnered with supermarket chain ParknShop across Hong Kong as competition heats up in the city’s fast-growing grocery delivery market.
From Thursday, customers using the food delivery app can order more than 1,000 different grocery items from 50 locations under the ParknShop brand, which is backed by tycoon Li Ka-shing’s AS Watsons Group.
The supermarket chain has more than 250 outlets across the city, which includes brands such as Fusion, International and Taste.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Brian Lo Ka-chung, Deliveroo Hong Kong’s general manager, said consumers have adopted on-demand groceries amid the coronavirus pandemic, adding that 80 per cent of customers using the platform to buy groceries also use it to order food from restaurants.
“We see groceries as the next wave of growth that we really need to crack open, and we want to be able to provide the right selection of products to our customers,” Lo said.
During the launch, customers living up to 1.2km from a ParknShop store could expect their items to be delivered to them in around 25 to 30 minutes, the general manager added.
According to Lo, Deliveroo’s on-demand grocery segment globally saw a 700 per cent surge year on year in the first quarter of 2021 in terms of gross transaction value.
The partnership with ParknShop was part of the UK-listed company’s plan to aggressively grow its on-demand grocery offering for consumers in Hong Kong, as other delivery platforms and e-commerce players ramped up their coverage across the city as Covid-19 fuelled e-commerce.
In May, Hong Kong online retailer HKTVmall teamed up with logistics partner Zeek to launch HKTVexpress, which enables customers within a 2km radius of 70 shops in the network to have grocery items delivered to them in less than an hour.
Separately, Foodpanda rolled out Pandamart in Hong Kong in late 2019, delivering groceries from its warehouses round-the-clock and as quickly as within 15 minutes. Pandamart has 17 warehouse locations in Hong Kong, each carrying about 4,000 types of items, and plans to open three more this year amid growing demand.
Deliveroo started its instant grocery service late last year in Hong Kong, partnering up with 7-Eleven, Marks & Spencer, and Japanese retailer Don Don Donki.
The company reported it has 7.1 million monthly active consumers globally as of the first quarter 2021, according to its latest trading update on the London Stock Exchange. Its monthly active consumer base on its app has grown 20 per cent between the fourth quarter of 2020 and the first quarter of this year.
In Hong Kong, online retail sales grew 27.2 per cent year on year in April 2021, amounting to a total worth about HK$1.8 billion, roughly 6.8 per cent of total retail sales value of HK$27 billion recorded that month, according to provisional government data.
In the first four months of the year, meanwhile, online retail sales have jumped 53.1 per cent from a year ago.
Up to 84 per cent of local consumers said they would likely continue using online channels to buy groceries in the future, according to a global survey by tax consultancy KPMG. It polled 12,334 consumers worldwide, including 1,000 in Hong Kong, between May and September last year.
Norman Yum, managing director of ParknShop, also said the partnership would allow the supermarket chain to stay on top of e-commerce trends and leverage Deliveroo’s expertise on instant groceries.
Yum said the supermarket’s digital business had grown 40 per cent year on year from its own shopping app and website, but its digital services only provide same-day in-store pickup and delivery for orders placed before 11am.
“We selected 50 locations to provide the best possible coverage in the trial phase. It is important to test the operations to make sure we provide the best customer experience, before expanding further,” Yum said.