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Foodpanda sees rising demand for cloud kitchen

Kuala Lumpur , 30/09/2019 - Foodpanda rider held a protest regarding on new payment system in Foodpanda headquaters in Kuala Lumpur. Credit to TMR / Pic by Arif Kartono

FOODPANDA Malaysia Sdn Bhd sees demand for cloud kitchens from food and beverage (F&B) industry players, as more people now opt for takeaway or delivery service rather than eating out.

Cloud kitchen is a concept which only offers pick-up and delivery options which differentiate it from other conventional restaurants, said its director of operations llanges Rao.

For example, he said a conventional restaurant selling Nasi Ayam Geprek is one brand in one kitchen, but cloud kitchen can have 10 different kinds of brand in one kitchen.

“The increasing number of restaurant owners chose a shared cooking space mainly because of a much lower cost — eliminating brick-and-mortar-related overheads. Because everything is online, they can get customers online through our Foodpanda apps, so there’s no offline acquisition.

“It is an economically viable option with low cost of entry and a high possibility of making a better margin,” he told The Malaysian Reserve.

With continued uncertainty over the Covid-19 pandemic and the great consumer shift, cloud kitchen — also known as ghost kitchen, commissary kitchen or virtual restaurant — is a shared kitchen to help restaurants minimise costs and maximise orders.

Silver Lining in Cloud Kitchen
The cost of a medium-sized restaurant in a prime location in the Klang Valley is between RM500,000 and RM1 million — covering rent, utility deposits, licences, branding and renovation, equipment, recruitment and training, opening stock and others.

With cloud kitchen, business owners can reduce additional cost and roughly will need an investment of RM50,000 to RM150,000 to start.

For example, Rao said for a typical restaurant with a size of 500 sq ft, 70% of it will be dedicated for dine-in, 20% for the kitchen and 10% for a cash counter and storage space.

“Cloud kitchen is totally opposite, it doesn’t have a 70% dine-in space. Hence, a 900 sq ft cloud kitchen usually can cater to six different restaurants.

“There are two types of cloud kitchen — first, our own kitchen called panda kitchen, where we host a few brands under one roof, and second, a third-party kitchen with their own platform,” he explained.

On challenges, Rao said it is how restaurant owners choose their product suitable for delivery and how they make sure the food tastes nice once it’s delivered.

He stressed that the owners need to ensure the food is suitable for delivery taking into account delivery time.

“One of the main reasons customers reorder from the same restaurants is because they enjoyed the food the first time they tried it out.

“Consistency is key when preparing food, be it prepared at a cloud kitchen or by typical F&B players,” he added.

Food Delivery on the Rise
On outlook for 2021, Rao said delivery services became a need rather than luxury, with Covid-19 as an unexpected catalyst.

“Until the vaccine is sorted out and solid, even when that happens, I think people are already adapted to the new norm. For us, we continue to serve with speed and variety.

“With increasing e-commerce penetration rates, it is moving in the right direction,” he said.

To date, there are 30,000 riders, 30,000 restaurants, 25 pandamarts and 3,500 shop partners registered with Foodpanda Malaysia.

Foodpanda Malaysia on Nov 30, 2020, announced its venture into daily grocery deliveries from over 3,500 vendors nationwide, promising a delivery time frame of less than 30 minutes.

The new service called “Shops” will allow customers to order from a variety of stores using one platform.

The platform recently partnered Tesco Malaysia to further strengthen its offerings with up to 3,000 more items ranging from fresh produce to groceries.

Foodpanda is a leading delivery platform in Asia Pacific dedicated to bringing consumers a wide range of food, groceries and more, quickly and conveniently.

Powered by technology and operational excellence, foodpanda is spearheading the growth of quick-commerce (q-commerce) across the region with its network of retail partners, as well as pandamart cloud stores to provide more on-demand options beyond the millions of food delivery options.

Foodpanda operates in more than 300 cities across 12 markets in Asia Pacific — Singapore, Hong Kong, Thailand, Malaysia, Pakistan, Taiwan, Philippines, Bangladesh, Laos, Cambodia, Myanmar and Japan.

Foodpanda is a subsidiary of Delivery Hero, a global leader of the food delivery industry.

Source: The Malaysian Reserve

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