Factors affect consumers’ decision on food consumption via mobile applications: An empirical case of GrabFood Delivery App

ABSTRACT:

In big cities, there have been big changes in the eating habits of many people, especially during the COVID-19 pandemic at the beginning of 2020. Due to the closures of restaurants, food beverage stores and measures of social distancing and quarantine, ordering and purchasing of food via online applications are considered an appropriate choice for young consumers. This study is to examine the factors affecting the satisfaction and the intention of customers to use GrabFood App to buy foods and drinks. The primary data was collected by interviewing 220 respondents living in Can Tho City, Vietnam, then analyzed by the Exporatory Factor Analysis (EFA) and multivariate regression. Findings show that there are 3 major groups of factors influencing customers' decision to choose GrabFood, namely (1) Brand name, (2) Convenience and (3) Social Influence. Some management implications to enhance the attractiveness and competitiveness of GrabFood and other delivery applications in Vietnam are proposed.

Keywords: Customers’ decision, GrabFood, Food Delivery App, Can Tho, EFA, social determinants.

1. Introduction

Given the rapid development of information communication technology and smartphones, smart technologies and mobile application (App) software have become an extensive and integral part of everyday life (Baabdullah, Alalwan, Rana, Patil, & Dwivedi, 2019; Dwivedi, Shareef, Simintiras, Lal, & Weerakkody, 2016; Lal & Dwivedi, 2009; Lu, Wu, & Hsiao, 2019; Malaquias & Hwang, 2019; Shareef, Archer, & Dwivedi, 2012; Shareef, Kumar, Dwivedi, & Kumar, 2016; Ismagilova, Hughes, Dwivedi, & Raman, 2019). Mobile apps are built and designed to be downloaded and used via smartphones or similar mobile platforms (e.g., iPads, tablets). In the first quarter of 2017, the number of apps globally available to be downloaded was about 2.2 million for Apple’s App Store and 2.8 million for Google’s Play Store (Statista, 2018a), and users had downloaded more than 178.1 billion apps on their mobile devices by 2017, a figure that is predicted to increase to 258.2 billion by 2022 (Statista, 2018b).

The continuous growth of the modern life has noticeably changed the eating habits of the majority of people (Rizana Oktari, Zakaria Wahab, Marlina Widiyanti, 2020). On April 22, Vietnam’s Prime Minister Nguyen Xuan Phuc lifted guidelines under Directive 16 (issued on March 31, 2020) on maximum social distancing for almost all localities without recently confirmed COVID-19 cases, including Hanoi, Ho Chi Minh City, and Danang.  Then, starting April 23, most cities and provinces are expected to begin loosening maximum social distancing guidelines in compliance with Directive 15 (issued on March 27, 2020). Understanding this change which needs to be taken care of, online food delivery services have been established to help consumers make use of convenient eating and drinking platforms.

According to a new research result published by GCOMM, the 6 most popular online food ordering applications in the Vietnam market include GrabFood, Foody/Now.vn, GoFood, Lala and Lixi, in order of popularity. GrabFood, Grab’s food delivery service, was founded in Vietnam after its presence in Indonesia and Thailand. According to data released by Grab, GrabFood is achieving impressive growth (81% market share) in Ho Chi Minh City and Hanoi, and has provided services to 15 provinces and cities across Vietnam after one year. In particular, Can Tho is considered as one of the cities with great demand, but GrabFood has only initially entered this market with other competitors. Therefore, it is necessary to identify and measure the factors that influence customers' decision to choose GrabFood in Can Tho City, thereby suggesting solutions to help managers implement policies to improve their service quality and attract more customers.

2. Research methodology

2.1. Research Model

The stages of the consumer decision-making process were first introduced and developed into a model, including five stages which are identifying needs, seeking information, evaluating options, purchasing decisions, and post-purchase evaluation (Blackwell, Miniard and Engel, 1973). As such, identifying needs is the first step in the decision-making process for consumers. Needs identification occurs when buyers are aware of the difference between a desired situation and the current situation (Zeithaml & Bitner, 2003). Sometimes, consumers are not aware of their needs, and marketers need to use appropriate marketing methods to help customers identify their own needs (Jobber, 2010). Customers see needs as a problem and seek solutions to solve it (Zeithaml & Bitner, 2003). When needs are identified, users often search for information about the service to meet their needs. Consumers can seek information from both sources of personal information (friends, experts, etc.) and non-personal information (media, etc.) as a way to minimize risks and find out more information about the service (Zeithaml, 1981).

The process of seeking information provides consumers with a group of brands as options. Consumers use criteria to compare these products or services. The selection criteria are the characteristics that the buyers are looking for (or not looking for). When using criteria, buyers evaluate and rank brands in the set of options (Jobber, 2010).

After comparing options, customers will decide to buy products and services from the selected supplier (Kotler and Armstrong, 2013). This stage may be affected by two factors. The first factor is other people’s opinions and the buyer’s willingness to listen to these opinions. The second factor is unexpected and unpredictable situations such as economic recession or wage decline (Kotler, Keller, Koshy and Jha, 2009).

Customers tend to evaluate their experience based on whether products and services meet their expectations. Marketing theories suggest that satisfied customers are demonstrated through their loyalty, recommendations to others, and willingness to pay (Ladhari et al., 2008).

In addition, Mei Min, Chow, Ling Hong, Chen, Jian Ai, Yeow, Pei Wah, Wong (2012) adjusted the model of Blackwell, Miniard and Engel (1973) to suit the research and the era. The author has also adjusted again according to the model of the above study and added two factors – Service performance (Liao, Yu-Jui, 2012) and Convenience (Karen Lim Lay-Yee, Han Kok-Siew, Benjamin Chan Yin-Fah, 2013) to fit the Vietnamese culture and context these days. The model proposes 28 measurement variables for 6 factors influencing customers’ decision to use GrabFood, including Brand, Price, Social influence, Service features, Service performance, and Convenience.

Figure 2.1: Proposed Research Model

"Service features" are attributes and characteristics of the product aiming to satisfy users’ needs. From the empirical research results of Market Analysis and Consumer Research Organization; Cheng Hui Ying, Huang Wan Ee, Lum Sin Yin, Yi Jie Tan (2013) (2009); Karen Lim Lay-Yee, Han Kok-Siew, Benjamin Chan Yin-Fah (2013), it is concluded that social needs have a positive impact on customers' choice.

“Price” is the total value that customers are willing to spend in exchange for the benefits of having or using a supplier's product or service (Kotler and Armstrong, 2010). The value of a product or service will vary with different types of customers, so there are many pricing methods, such as cost pricing, value-based pricing, target return pricing, current pricing and promotional pricing (Kotler and Keller, 2012). Cheong and Park (2005) shows that user-perceived price will influence the decision to use the service.

"Social influence" is understood as the psychology of individuals who are influenced by each other, from which the behavior of one person (or group of people) becomes the orientation for the behaviors of others’ (Tran Thi Minh Duc, 2008). Consumer behavior is also influenced by social factors such as reference groups, families and the role of social status (Kotler and Armstrong, 2010). Accordingly, the research of Pederson, nd (2011), Cheng Hui Ying, Huang Wan Ee, Lum Sin Yin, Tan Yi Jie (2013) indicates that social influence has a positive impact on the customers’ decision to use the service.

"Brand" is a collection of customers' feelings about a product, service or a company with all aspects, including name, terminologies, symbols, and drawings, according to Philip Kotler. Cheng Hui Ying, Huang Wan Ee, Lum Sin Yin and Tan Yi Jie (2013) support that brands are value added for products and services and that they can reflect the way consumers think, feel and act towards the brands. This shows that brand has a positive impact on the user's decision to use the product.

"Convenience" has been surveyed globally and as a result, more than a quarter of global consumers say they seek products that make their lives easier (27%) and are convenient to use (26%). Meanwhile, about one fifth of consumers are searching for products which are suitable for small households (20%) and tailored to specific needs (19%) (Nielsen, 2018). According to Karen Lim Lay-Yee, Han Kok-Siew, and Benjamin Chan Yin-Fah (2013), the convenience of experiencing products or services through simplification and ease of use for customers will be affect customers' decision positively. Thus, convenience has a positive impact on the customers’ decision to choose a product.

“Service performance” is closely related to product quality and customer value (Philip Kotler, Suzan Burton, Kenneth Deans, Linen Brown, Gary Armstrong, 2013). A study has demonstrated that service performance is a measure of satisfaction and will increase the ability of a customer to choose a product or service in the future (Liao, Yu-Jui, 2012 cited in Rajasekaran, Cindhana and Anandha Priya, 2018). Accordingly, service performance will have a positive impact on the customers’ decision to choose a product or service.

2.2. Research Methodology

Primary data was collected through direct interviews with questionnaires for 220 customers who use GrabFood in Can Tho City. The tests used in the article including Cronbach’s Alpha coefficient is a test of the relationship and correlation between variables of the observed subject. Then, Exploratory Factor Analysis (EFA) is a statistical analysis method that is simplified from several correlated observation factors into a set of variables. Finally, multivariate linear regression. After identifying new variables from the EFA, these new variables will be considered as independent variables in the regression model. The dependent variable is "decision making". The purpose of a multivariate linear regression method is to estimate the extent of the impact of the independent variables on the dependent variable.

3. Results and discussions

3.1. General information about respondents

For gender, 69 respondents were male (accounting for 31.4%) while 151 respondents were female (accounting for 68.6%). The difference is quite high between men and women. Women are the decision makers when it comes to food and essential goods. They are more concerned about family, health and life than men. Therefore, they also pay more attention to the need to use shopping and dining applications.

For the occupation, the interviewees are quite diverse, but the group of respondents who are in high demand of GrabFood is students, accounting for 79.5%. This is a group of customers who have a big interest in online shopping because of the convenience, cheap price, and many different offers. The next occupations constitute a relatively low proportion, with office employees accounting for 10.9%, businessmen accounting for 4.5% and freelancers occupying 5%.

For the age group, the interviewed customers belong to different age groups, but it can be seen that people aged 18 to 25 years old accounts for the majority of the sample (70.9%). During the survey, this age group was easily accessible and most willing to respond. Besides, people in this age group are mostly students. They often have high demand for mobile applications, always aiming at utility, fast, cheap and timely service. Therefore, this age group makes up for the highest number of users of GrabFood service in Can Tho City. People, who are over 40 account for 1.2%, who are usually quite careful and less willing to change consumer habits.

For the average income, according to the dataset of the target audience, GrabFood mainly targets the low and middle-income group, with nearly 90% of respondents having an income below 5 million. They need and are willing to use this service at a reasonable cost, price, and affordable experience. Those with higher income (above 5 million, accounting for about 10%) often seek for the value of products and experiences rather than the product price itself

3.2. Testing scales and factor analysis

The author used Cronbach’s alpha test to test the scale. The results (Figure 3.1) show that Cronbach's alpha coefficient of 6 groups is greater than 0.6. From 25 observed variables, after testing, 24 variables were included in the EFA with Principal Components extraction method and Varimax Rotation. After that, 5 variables were removed from the model due to the failure to satisfy the factor loading. Moreover, the KMO coefficient = 0.898, and Bartlett test has Sig. = 0.0 (reject hypothesis H₀ at 1% significance level). The number of factor groups drawn is 6 groups, reaching the ability to explain 68,144% of the variation of data. There are 24 variables representing the factors that impact the customers’ decision to use GrabFood in Can Tho City, with the specific variables of the factors being rearranged in a different way from the original model (there are 6 factors).  

Figure 3.1: Exploratory Factor Analysis Results

Source: EFA analysis by using SPSS16.0, 2020

3.3. Multivariate regression analysis

In order to identify which factors from 1 to 6 really influence consumers' decision to use GrabFood in Can Tho City, the linear regression equation was employed (Figure 3.2). According to the regression results, we have the adjusted R² value of 0.69. With the above results, this model shows that the independent variables account for 69% of the change in the GrabFood service decision scale, and this model is consistent with the data at the confidence level of 95 %. Moreover, the sig. value of all variables are less than 5%, indicating that these variables are statistically significant at 5%.

For social influence factor, it has a B-coefficient of 0.416, meaning that when the social influence factor increases by 1 unit, their decision to use GrabFood increases to 0.416 when other factors remain unchanged. Social influence is generally understood as a person's behavior that becomes a guide to the behavior of others. This is explained that when customers choose to use GrabFood, most of them are influenced by social trends, especially those around them such as friends and relatives.

Figure 3.2: Multivariate regression analysis results

Source: Research results, 2020

For convenience factor with a B-coefficient of 0.235 means that when the convenience factor increases by 1 unit, their decision to use GrabFood increases to 0.235 units when other factors are constant. Customers of this type of service are mostly young people from a wide range of occupations. Saving time and having instant service are always the top concerns. This is an important element of modern customers, so convenient payment methods and transportation are always invested and developed by businesses to attract and retain customers.

The next factor affecting the decision to choose GrabFood is brand, with a coefficient of B = 0.112. The influence of the brand in the era of technology 4.0 is extremely significant. Therefore, branding strategy is a very important part for businesses if they want to have a sustainable development and stand out from competitors. Enterprises following this factor to build their image are considered to have a wise strategy.

Three factors including service features, price and service performance are not meaningful, so we can understand that these 3 variables have no effect on consumers' decision to choose GrabFood in Can Tho City.

4. Conclusions and management implications

The results of the regression analysis show that social influence (3) has the strongest impact level among 3 groups of factors affecting the user's decision to use GrabFood in Can Tho City. In order to raise the interest of customers, businesses need to cooperate, build programs and campaigns towards social needs. For example, commitment and cooperation events to ensure food safety, environmental protection or restrict the use of plastic waste products, etc. Besides, brand (4) is closely related to image building in the minds of customers of the business. Therefore, businesses need to strengthen the development of promotions aimed at sharing with friends, relatives and activities towards the common good of the community. This is also an opportunity for businesses to increase brand recognition widely.

In addition, the remaining factor groups are: service characteristics, price and service performance have no effect on the user's choice (under the condition that the assumption factor groups remain constant during the study). A number of considerations should be taken into account in designing a tracking system. For example, such a system should be designed to be simple and user friendly. Using map tracking could be suitable for this purpose as it would provide a visual and easy way for customers to track their orders. Furthermore, customers need to have sufficient information (length of delivery, location of the restaurants, distance between restaurant and customer’s location, product quantity, cost, and name of the driver) regarding their food order (Shareef, Dwivedi, Kumar, & Kumar, 2016). It is important to ensure that all the information provided by an online tracking system is accurate, reliable, and credible, otherwise customers could lose trust in the online tracking ability and in Grabfood Apps in general. Finally, demographic characteristics such as gender, occupation, age, income, sources of information on how they know GrabFood and retention period also illustrate effectively for the user's decision.

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CÁC YẾU TỐ ẢNH HƯỞNG ĐẾN QUYẾT ĐỊNH SỬ DỤNG ỨNG DỤNG DI ĐỘNG ĐỂ TIÊU THỤ THỰC PHẨM CỦA NGƯỜI TIÊU DÙNG: NGHIÊN CỨU THỰC NGHIỆM ĐỐI VỚI ỨNG DỤNG GIAO HÀNG GRABFOOD

NCS. Huỳnh Thị Cẩm Ly

Newcastle Business Schoo, Newcastle University

ThS. Trần Thị Bạch Yến

Đại học Cần Thơ

TÓM TẮT:

Tại các thành phố lớn, thói quen ăn uống của nhiều người đã có sự thay đổi, đặc biệt là trong bối cảnh đại dịch COVID-19 xuất hiện vào đầu năm 2020. Do các nhà hàng, cửa hàng thực phẩm đóng cửa chỉ phục vụ qua giao hàng và các biện pháp cách ly xã hội, việc đặt hàng và mua thực phẩm qua các ứng dụng trực tuyến được coi là một lựa chọn thích hợp cho người tiêu dùng, nhất là nhóm khách hàng trẻ tuổi. Nghiên cứu này nhằm mục đích kiểm tra các yếu tố dự đoán sự hài lòng của khách hàng và ý định sử dụng ứng dụng GrabFood để mua thực phẩm và đồ uống. Dữ liệu được thu thập bằng cách phỏng vấn 220 khách hàng sinh sống tại thành phố Cần Thơ, Việt Nam, sau đó được phân tích bằng phương pháp phân tích nhân tố khám phá (EFA) và hồi quy đa biến. Kết quả nghiên cứu đã chỉ ra có 3 nhóm yếu tố chính ảnh hưởng đến quyết định của khách hàng khi chọn GrabFood như Tên thương hiệu (1), Tiện lợi (2) và Ảnh hưởng xã hội (3). Một số hàm ý quản trị được đề xuất nhằm tăng cường sức hấp dẫn và khả năng cạnh tranh của GrabFood và các ứng dụng giao hàng khác tại Việt Nam.

Từ khóa: Quyết định lựa chọn, GrabFood, ứng dụng giao thực phẩm, Thành phố Cần Thơ, phân tích nhân tố khám phá, yếu tố xã hội.

[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ, Số 10, tháng 5 năm 2020]