Singapore food-delivery goes up-market with Deliveroo

• Brought down average food delivery times to under 30 minutes in Singapore
• Segmenting food delivery into zones allows for food quality and presentation

 
SINGAPOREANS love their food, and these days, they love having their food delivered to their doorsteps too, going by the success of services like Rocket Internet’s foodpanda.
 
The city-state was enough of a lure that UK-based Deliveroo made its entry last November, also buoyed by what it saw as weaknesses in the current state of play.
 
Indeed, the general manager of its Singapore operations, Tristan Torres Velat (pic above), goes so far as to say there was no reliable food delivery business in the city.
 
“You didn’t know when the food was going to arrive, there was no transparent process, with average delivery times of between 60 and 90 minutes – even for fast food,” he argues, speaking to Digital News Asia in Singapore recently.
 
Velat was with regional e-commerce company Ensogo when Deliveroo approached him, saying it wanted Singapore to be its first Asian market.
 
The city has a number of pull factors: “It is a highly dense and wealthy city, and there is a good supply of restaurants – and finally, there was no reliable food delivery company,” he declares.
 
In Asia Pacific, the company has now also launched in Hong Kong, Melbourne and Sydney.
 
Deliveroo’s Singapore decision seems to have paid off, with Velat saying it managed to get 600 restaurants on board in less than four months. The local office has over 30 people, and more than 450 riders on the streets.
 
“We don’t disclose our order volume but … we have been growing 50% to 70% week on week,” he claims.
 
Quality the differentiator
 
According to Velat, Deliveroo’s growth has mainly been driven by the fact that its focus is on quality and not quantity.
 
“We are not a marketplace,” he says, adding that quality in Deliveroo’s view is defined by three points, starting with the restaurants themselves, which have to be mid- to high-tier restaurants.
 
“We only work with the most loved restaurants in Singapore, like Potato Head Folk, P.S. café, and MEATliquor – all those brands that people in Singapore never expect to deliver,” he says.
 
“The second point about quality is in the technology we are using – all the processes happen in our backend.
 
“We have an end-to-end solution, from the customer ordering to us delivering the food, everything is done by us – we do not outsource the process, and there is no manual interaction in the process.
 
“This allows us to deliver food within an average of 32 minutes, although in Singapore the average is under 30 minutes,” he adds.
 
The third point of quality is in the customer experience, and this is where transparency also plays a role.
 
“When you use either our website or app, you can track the status of your food – with the app, you can also see the rider moving towards you,” says Velat.
 
Curating restaurants requires local knowledge, and Deliveroo works only with locals to ensure cultural nuances are not lost, according to Velat, who has been living in Singapore for the past five years.
 
Mid- and high-tier restaurants usually are not receptive to the idea of delivering their food, but this isn’t the case in Singapore, where space is at a premium and may cap growth opportunities.
 
Indeed, their biggest concern is ensuring the food quality and presentation remain the same despite having been delivered, according to Velat.
 
But “when they see our process and how we deliver food – we don’t deliver more than eight to 10 minutes away from the restaurant – they realise that the food arrives in the same way it would be like in the restaurant,” he claims.
 
Hyperlocal segmentation
 

 
One edge Deliveroo has is in how it has split up the delivery areas into zones, ensuring the order does not travel more than 10 minutes, to maintain the food quality.
 
“How I see the business is completely different from any other food delivery company in Singapore – I see Singapore as a hypersegment of local markets,” says Velat.
 
Each ‘hypersegment’ or zone will have its own roster of ‘most-loved restaurants.’ Each zone is defined by its postal code.
 
“We don’t work with more than 32 to 35 restaurants per zone, so we are able to match the type of cuisine and are able to pay special attention to all our restaurants,” says Velat.
 
“Once we sign up a restaurant, we assign it an account manager, and it’s a win-win, long-term relationship – we do the marketing and specialised local action within each zone.
 
“What we bring is convenience – when you want to order food, you want to order food now, from a place that you like.
 
“If you want to try out a new restaurant, you will go there for the experience. After you’ve tried it and like it, then you will make delivery orders from it,” he adds.
 
Moderation and challenges
 
Deliveroo’s restaurants partners need to consistently deliver quality, according to Velta, who says he would not hesitate to drop under-performing restaurants.
 
“Each account manager ensures that the restaurant’s quality is impeccable – the moment we have some complaints about food quality, packaging or anything, we will work it out with the customer,” he says.
 
“If there is a case of a restaurant giving customers a bad experience, we will drop it,” he adds.
 
Velat holds weekly meetings with account managers to rank the various restaurants with a scorecard.
 
Deliveroo also advises its restaurants “on what type of packaging they should use – how they should deliver pizza, how to make sure French fries are not soggy,” he says, adding that this comes from the knowledge it has working in 55 cities worldwide.
 
While supply and demand within Singapore seems healthy, the biggest challenge Deliveroo faces is on the manpower front, with the need to hire more riders.
 
“Because we are growing so fast, I need to hire close to 100 riders week to week,” claims Velat.
 
Business model and plans
 
Velat (pic) declares that Deliveroo has changed the food delivery business in Singapore, saying that six months ago, 60 minutes was the accepted delivery time, “but now we have brought it down to 30 minutes.”
 
Currently, the platform is free for customers and restaurants to join.
 
However, customers are levied a delivery fee: The average minimum order value is S$25 (US$18) – if you order above S$25, it is a S$3 delivery fee, and if the order value is below S$25, the delivery fee is S$8 (US$5).
 
Deliveroo has raised a total of nearly US$200 million, with the bulk of it coming in 2015.
 
According to Velat, it is eyeing more markets in Asia, but has not decided which ones yet.
 
In Singapore itself, it aims to be an island-wide network within the next six months, he says.
 
And to spice it up, he adds: “Next month, we are going to announce a big partnership with a market leader here, and this is going to be a game-changer for us in Singapore.”
 
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