Digital marketing fuels ever more food sector sales in Asia-Pacific
January 2024
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With digitization, foodservice emerges stronger after COVID-19
After facing the adverse impacts of the pandemic, the foodservice sector has emerged stronger and adopted technology and digitalization to its advantage. Operators came up with new solutions to offset pandemic-induced challenges and most of these solutions leveraged technology. Some of the major technologies that the foodservice sector adopted include digital marketing and an increased virtual presence, online ordering, and digital payments.
Smartphone penetration: a major boost to digital marketing
Digital connectivity is heavily ingrained in consumers’ lifestyles with the current trends of multitasking on their smartphones and instant gratification. An increasing number of consumers show interest in purchasing a product in-store or ordering an item at a restaurant after they have heard about it on social media or other online avenues. In terms of decision making, consumers use their smartphones to research a product before purchasing it, making it a key influence in transactions. For instance, 67% of Gen Z consumers in Australasia consider smartphone app connectivity essential or nice to have while making a product purchase, according to this survey*. Other areas where digitalization was employed were the advent of online menus, integration of third-party delivery vendors, and new payment systems and e-wallets. The pervasive penetration of smartphones has tremendously helped in the substantial growth of the online ordering and delivery ecosystem.
Social media: the behemoth for drawing consumers
The widespread adoption of social media among customers enables the success of new avenues for companies in this digital era. Digital ecosystems, with high penetration rates of internet and internet-enabled devices, present significant opportunities for novel and effective marketing approaches using the power of social media.
Most modern-day consumers get meal inspirations from brand posts and videos on social media such as Facebook, Instagram, TikTok, and YouTube. About 42% of consumers in Asia-Pacific reportedly use social media feeds to get purchase ideas and use the platform to make the purchase**. F&B companies are also increasingly using WhatsApp and SMS texts with a personal touch for reaching out to customers. However, these need to be finetuned according to the frequency of visits and other consumer preferences. Continued customer engagement may also be ensured by implementing solutions to avoid cyber attacks, and not overwhelming customers with too much information. Nevertheless, the emerging patterns of digital detoxes and avoiding online browsing for mental health and wellbeing will inhibit this trend. Ultimately, it is important to analyse which digital avenues are the most effective for which cohorts of consumers.
While F&B operators have invested in digital systems to increase the visibility of their businesses, a few of them have further extended their reach by utilizing live commerce, which embeds a live streaming channel in ecommerce platforms to allow them to promote and sell products on the channel. Social media live commerce offers an innovative platform to reach consumers by enabling their interaction with the host and shop for the products on sale. The host conducting the live streaming session is often an influencer, a key opinion leader (KOL) or a key opinion customer (KOC). In other cases, the company’s sales personnel or board executives interact with viewers and promote products. While fashion and beauty companies pioneered this phenomenon during the pandemic, FMCGs and F&B companies are now using it with stellar results.
In China, sessions streamed by celebrities and C-level company executives have gained the highest traction. Several startups are using platforms such as WeChat and Weibo and enlisting the help of KOLs or KOCs to market their brands cost-effectively. In the F&B realm, digital-first companies, such as Saturnbird Coffee and Perfect Dairy effectively rode this wave to quickly gain a foothold in the Chinese consumer market. For instance, Saturnbird did not use an offline store or ecommerce to start its business and instead chose popular Chinese online recipe-sharing and lifestyle platforms to do so. Such successful startups and mid-level companies now present viable competition to global MNCs operating in the region. This has forced established players who hitherto relied on traditional marketing strategies to sit up and take note of these new digital avenues to reach their target customers. Thus, some of the larger chains in the sector started to utilize technology in a better way and employ digital means to revitalize their businesses.
Author: Jaya Dandey
Consumer Analyst at GlobalData
Source: GlobalData Consumer Insights
* GlobalData Q4 2023 Consumer Survey – Asia & Australasia
^ Retail Asia, November 2023
