Comprehensive Market Research: Hong Kong Food Delivery Services

This market research report provides a comprehensive analysis of the online food delivery services in Hong Kong, examining the current market scenario, consumer preferences, and emerging trends. The study investigates the competitive landscape, with a focus on major players like Foodpanda, Deliveroo, and Uber Eats, and explores the challenges and opportunities within the industry. The research employs a mixed-methods approach, including a literature review to understand the factors influencing consumer repurchase intention and primary data collection through a quantitative survey of 100 respondents in Hong Kong. The findings address research objectives, including identifying key challenges, understanding consumer perceptions, and recommending strategies for sustainable competitive advantage. The report is structured into six chapters, covering an introduction, literature review, research methodology, data description, data analysis, and conclusions with recommendations. The research aims to assist food delivery services in Hong Kong in developing effective strategies to enhance market share and improve consumer loyalty in a highly competitive environment.

Running head: MARKET RESEARCH
Market research about Hong Kong online food
delivery services
Name of the student
Name of the university
Author note

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Declaration
I hereby declare that the project titled “Market research about Hong Kong
online food delivery services” is my own work and I have carried this out
under the supervision of _________.
I also certify that the work is my own original work and the work has not been
submitted to any other university. The guidelines mentioned by the University
has been followed in the report. We have provided credit to the authors by
citing their work at all times.

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Abstract
The research aimed to examine the food industry in the Hong Kong to
understand the current scenario in the market, preference of the consumers
and the way the market trends are changing. The literature review evaluated
the different internal and external factors affecting the consumer repurchase
intention to understand the factors that has to be focused on by the
companies in the market. The research used a mono method where primary
data has been collected to perform quantitative through of 100 respondents in
Hong Kong. The findings have tested all the hypotheses mentioned in the
literature review section and had identified factors relevant to the evaluated
market.

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Acknowledgements
I would like to express my gratitude and appreciation to my supervisor,
__________ who has supported and advised at all times throughout the
course of the study. I would also like to give special thanks to my unit
coordinator, _________ for assisting and encouraging me to take up this
research topic. My special thanks to the respondents for cooperative with me
and helping me to complete this survey.

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Table of Contents
Chapter One: Introduction.................................................................................7
1.0 Introduction..............................................................................................7
1.1 Background of the study..........................................................................7
1.2 Research problem....................................................................................8
1.3 Research rationale...................................................................................9
1.4 Research objective.................................................................................10
1.5 Research questions...............................................................................10
1.6 Organisation of the study.......................................................................10
1.7 Summary................................................................................................12
Chapter Two: Literature review.......................................................................13
2.1 Introduction............................................................................................13
2.2 Global online food delivery market........................................................13
2.3 Online Food delivery services................................................................16
2.4 Consumer Perception on food delivery services...................................18
2.4.1 Hedonic motivation.............................................................................19
2.4.2 Prior experience of online purchase...................................................20
2.4.3 Time saving orientation.......................................................................22
2.4.4 Price saving orientation.......................................................................23
2.5 Other Critical success factors in the industry.........................................24
2.5.1 Information..........................................................................................24
2.5.2 System quality.....................................................................................25
2.5.3 Design Quality.....................................................................................26
2.5.4 Technology Acceptance model...........................................................26
2.6 Conceptual Framework..........................................................................28
2.7 Literature gap.........................................................................................28
2.8 Summary................................................................................................29

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Chapter three: Research Methodology...........................................................30
3.1 Introduction............................................................................................30
3.2 Research Philosophy.............................................................................30
3.3 Research Approach...............................................................................31
3.4 Research Design....................................................................................32
3.5 Data collection and Analysis..................................................................32
3.6 Sampling process...................................................................................33
3.7 Reliability and Validity............................................................................33
3.8 Ethical consideration..............................................................................34
3.9 Summary................................................................................................34
Chapter Four: Data Description.......................................................................36
4.1 Reliability and Validity............................................................................36
4.2 Descriptive Data.....................................................................................39
4.3 Correlation Matrix...................................................................................44
4.4 Regression analysis and hypothesis testing..........................................48
4.4.1 Hypothesis 1.......................................................................................48
4.4.2 Hypothesis 2.......................................................................................50
4.4.3 Hypothesis 3.......................................................................................51
4.4.4 Hypothesis 4.......................................................................................52
4.4.5 Hypothesis 5.......................................................................................53
4.4.6 Hypothesis 6.......................................................................................54
4.4.7 Hypothesis 7.......................................................................................55
4.4.7 Hypothesis 8.......................................................................................56
Chapter Five: Data Analysis............................................................................58
Chapter Six: Conclusions and Recommendations..........................................64
6.1 Conclusion.............................................................................................64
6.2 Key Findings..........................................................................................65

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6.3 Recommendation...................................................................................66
References.......................................................................................................67
Appendix..........................................................................................................73

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CHAPTER ONE: INTRODUCTION
1.0 INTRODUCTION
This study aims to examine the food industry in the Hong Kong to
understand the current scenario in the market, preference of the consumers
and the way the market trends are changing. China is one of the largest
growing economies in the world and there has been significant increase in
competition in the market due to the presence of strong competitors in the
market. Hong Kong is one of the leading tourists’ spots for Asian countries
with diversity in culture and food. This study highlights the road map for
success in this highly competitive environment by performing extensive
research on the given topic.
1.1 BACKGROUND OF THE STUDY
In the past few years, the digital food courier services have expanded
significantly in Hong Kong. Foodpanda is the restaurant aggregators for
Rocket Internet at the global platform and they have been able to expand their
business significantly which is represented by the US$60 million acquired
from existing and new investors for growth and development (Woodhouse,
2016). The arrival of multiple online food ordering services have fuelled up a
new trend in the city. This has also affected the local diners working as it has
affected the way they are ordering food due to the access they are getting to
diverse cuisines (In, 2014). The online delivery service have come a long way
after entering the Hong Honk food and beverage industry in the past five to six
years. Hong Kong, being one of the most lucrative places for food and
beverage services, the competition has increased significantly and with the
market entry of another industry giant, British company, Deliveroo has entered
the market (Leung, 2019). Moreover, the company offered subscription plans
for the consumers at HK$98 which waives of all the monthly delivery cost
(Leung, 2019). Consumers in Hong Kong are also price sensitive, even
though they have high disposable income.
Uber Eats, Foodpanda and Deliveroo can be considered as the three
major players in the Hong Kong market where Deliveroo enjoy the lions share
in the market. However, the new subscription services has been developed to

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increase the market share significantly. Currently, the overall food delivery
market in Hong Kong generates US$615m which shows that a year on year
growth rate of almost 10% and the number of active users consists of 2.3
million consumers (Woodhouse, 2016). Moreover, due to the increase in the
number or companies providing delivery services to the consumers,
restaurants are able to negotiate the fees which is lowering and squeezing the
margin. Moreover, as the market size of Hong Kong is smaller compared to
the other parts in China, there are limits to the extent to which an organisation
can grow in market. Therefore, role of technology and infrastructure is critical
in improving the growth of various companies in the market, otherwise it will
become more difficult to increase profit margin.
1.2 RESEARCH PROBLEM
In order to understand the problem area of research, it is key to
understand the current scenario in the Hong market and the changes
experienced in the behaviour of the consumers. Internet of things and other
technologies have changed the way businesses operate in a market along
with the change in the consumer outlook. Ecommerce and transactions of
various types of online platforms has made it all about value for money and
convenience as key factors to change (Yeo, Goh & Rezaei, 2017). Therefore,
online food and beverage delivery services has also taken a turn as it
facilitates two way communication and is more convenient. This has
encouraged majority of the companies in using Internet of Things into their
marketing mix for luring consumers in making online purchase (Yeo, Goh &
Rezaei, 2017). However, as the market in Hong Kong is smaller compared to
other global market, it has become imperative for the companies to take up
new and innovative strategies to increase their market share (Soo &
Woodhouse, 2016). Moreover, as the number of companies have increased,
the bargaining power lies in the hands of the suppliers (the restaurants) that
are aiming to form partnerships at lower prices. This affects the overall profit
margin of the companies, like Foodpanda, UberEats and Deliveroo as it is
difficult to grow in market having smaller number of target consumers (Leung,
2019). Moreover, there has been a significant change in the buying behaviour
of the consumers due to emergence of online food delivery applications.

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The market has seen the big companies falter and take serious
measures to get back on track in a crowded food delivery market. Foodpanda,
one of the early movers into the Hong Kong food delivery market were forced
to lay off more than 15 per cent of their staffs so that they could revamp their
existing strategy in the market (Soo & Woodhouse, 2016). This was an
attempt to reduce the operation cost for the organisation and improve profit
margin in a highly competitive market. Foodpanda has struggled to turn a
profit and reducing cost by using penetration price strategy to lure in more
consumers (Soo & Woodhouse, 2016). These efforts were made for the
company to remain competitive and offer similar prices with respect to the
other companies in the market. The competition is not limited to the pricing
strategy but also the time taken for delivery and overall consumer experience.
Deliveroo has earned good reputation in the market and all the companies are
always to outdo one another which has resulted in shorter competitive
advantage for all the companies. This is the reason it is essential to evaluate
the current scenario in the market to develop strategy that could bring
sustainable competitive advantage for the companies for a longer period of
time.
Thus, it has become mandatory for the companies to develop
innovative strategies to lure in more consumers due to the intensity of
competition in the global market. The study aims to address and evaluate this
aspect of the study by assessing the current market scenario along with the
changes purchase behaviour of the consumers. This will successfully provide
an overall analysis of the overall Hong Kong which can be used as a guideline
for gaining sustainable competitive advantage.
1.3 RESEARCH RATIONALE
This research aims to bring awareness to the management of different
food delivery services by providing them with in-depth knowledge and data on
the Hong Kong market and the changing needs of the consumers. The
companies have been facing difficulties in holding to on the sales volume
significantly. The amount of switching segment is higher than the loyal
consumers of each brand. The majority of the section are switching
consumers that look great opportunity to order their favourite food. Moreover,

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the quality of the service is another critical factor in effectively contributing to
the change in the industry as the consumers are very particular about the
service they are receiving. This study will critically examine and highlight the
switching segment and strategies needed to turn them into loyal consumers in
the market. Thus, the research aims to make breakthrough in understanding
the dimension of online food delivery market in Hong Kong.
1.4 RESEARCH OBJECTIVE
The research objective of the current studies are as follows:
 To examine the current market scenario in respect to online food
delivery services in Hong Kong
 To identify the key challenges and opportunities in the Hong Kong
market
 To understand the consumer perception on the food delivery services
 To recommend suitable strategies to be implemented by the
companies for generating sustainable competitive advantage in the
market
1.5 RESEARCH QUESTIONS
Primary Research questions:
 What is the current scenario in the Hong Kong foo delivery market?
 What are the key challenges and opportunities that can be capitalised
by the companies in Hong Kong?
 How does the consumer purchase intention in changing in respect to
the online food delivery services
Secondary Research question:
 What are the necessary strategies for developing sustainable
competitive advantage in the market?
1.6 ORGANISATION OF THE STUDY
The study has been divided into primarily six chapters and each
chapter is a continuation of the previous one and linked together to develop a
suitable research report. The first chapter is the introduction which provides a
detailed background of the research context along with the significance and

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the contribution of the research. The research objectives and questions are
formulated to depict the outline and scope of the current research. The next
chapter is the literature review which provides a detailed analysis of the past
literature of the research which includes analysis of the market scenario in
Hong Kong in respect to the online food delivery services and the changes in
the perception of the consumers. This has facilitated in understanding the
current drawbacks and gaps in literature which can be addressed using the
current study.
The third chapter is the research methodology section which creates a
specific research design to fulfil the goals and objectives of the current
research. It has described the research methods, frameworks and processes
used to collect and analyse data. The fourth chapter is the data description
chapter which presents the collected data by using the suggested method.
This will help in understanding the demographics of the participants and other
relevant data using tables, graphs and charts like scatter plots. The fifth
chapter is the continuation of the previous chapter where the data presented
will be analysed to uncover valid findings. The interpretation of the described
data has been carried in this section to address the research objectives and
questions. The final chapter provides a link between the previous chapters
and highlight key conclusions. It will also provide a summary of the objectives,
goals and methods used to address the study. The practical implication has
been described in this research and provide a detailed analysis of the
recommended strategies that can be used. The limitation of the overall
research has also been portrayed to understand the future scope of research.
Chapter 1: Introduction
Chapter 5: Data Analysis
Chapter 2: Literature Review
Chapter 3: Research Methodology
Chapter 4: Data Description