Kingdom’s food delivery business to net $170M – Khmer Times
The food delivery business in Cambodia that got its momentum during the Covid-19 lockdowns is expected to make further strides and net a revenue of $170.2 million by the end of the current year.
The industry will have a compound annual growth rate (CAGR 2024-2029) of 17.28 percent and a revenue of $377.6 million by 2029, according to market research website Statista.com.
Just last month, Cambodia’s food delivery sector got an unexpected boost when the Kingdom’s pioneer in food delivery apps NHAM24 soared past the coveted million mark in registered users on March 18. Starting life as a mere food delivery app in 2016, it has now evolved to become a comprehensive digital lifestyle platform.
Borima Chann, CEO and Co-Founder of Nham 24, divulged some of the secrets behind the roaring success of the delivery service business to Khmer Times recently.
“Our success lies in maintaining a growth mindset and a clear focus on our goals. We have differentiated our offerings by delivering a unique and superior customer experience, which fosters strong customer loyalty. This loyalty is crucial to our sustainability,” he said.
Food delivery companies are on the rise in developing countries, fuelled by factors like growing cities, more money to spend, and better internet access, said Priyanka Chetry, Founder of Grocerdel in Cambodia. Food companies provide a convenient and affordable way for people to get restaurant meals delivered, while also giving restaurants, especially smaller ones, a chance to reach more customers.
Despite the surge in popularity, food delivery companies in developing countries face a number of challenges. These include underdeveloped infrastructure, leading to logistical difficulties in last-mile delivery and navigating narrow streets and traffic congestion in dense cities for drivers. Intense competition and the need to offer discounts to attract customers are putting pressure on profit margins of the companies.
The primary challenge facing NHAM24, is the intense competition, which is more aggressive than ever. “We are continually adapting our strategies to stay ahead in this dynamic market,” said Borima.
The government has been very supportive of businesses in this sector. Additional incentives or tax breaks for startups would be highly beneficial, he said, adding that NHAM24 fully supports the government’s efforts to advance the digital ecosystem in Cambodia.
The market’s early stage presents an exciting opportunity for new players and innovative solutions. Regional giants like Foodpanda and Grab entered the fray, reflecting confidence in the market’s potential.
Competition will also intensify as the market matures, requiring businesses to differentiate themselves and offer competitive pricing. Despite these challenges, the future of Cambodian food and grocery delivery market looks bright. Continued economic growth, infrastructure development, and a tech-savvy population position the industry for significant expansion.
Borima outlined his company’s immediate plans to focus on retention and growth. They are accelerating the development of new verticals while reinforcing their core business. Additionally, they have exciting plans for cross-border expansion, with intentions to extend their reach beyond Cambodia in the near future.
Cambodia’s food delivery scene is ripe for growth. A booming foodservice industry, fuelled by a rising middle class and mobile phone use, creates a strong demand for convenient food delivery options.
- Tags: Nham 24
