Food is best enjoyed in a comfortable environment. But definitions and preferences of comfort differ. Some enjoy the beautiful ambiance of a restaurant or the vibrancy of the food courts, while others prefer the quiet of their homes or a quick meal by their workstations.
Today I touch upon a crucial aspect of the food scene not just in Singapore, but also across the globe… Food delivery. Did you know that on an average, over 100,000 food deliveries of different types happen across Singapore in a single day? Let’s hear more about the food delivery market of Singapore, the challenges and opportunities and some useful pointers that make restaurants click, from the man who knows this market the best, Kiren Tanna, the co-founder of www.Foodpanda.com, Rocket Internet’s online food delivery and order initiative.
Sonal: Let’s start with the story that leads up to foodpanda.
Kiren Tanna: In early 2012, I joined Rocket Internet who was trying to set up Foodpanda in Asia. It has been a popular concept in the USA. So we wanted to bring this concept to food loving Asian region. We started off with 4 countries – Singapore, Indonesia, Thailand and Malaysia. We then added 4 more countries in the next two months, including India, Taiwan, Vietnam and Pakistan. So covered 8 countries in Asia and we have stuck around with those 8 countries since in Asia, while expanding in other continents. Today we have 28 countries in foodpanda globally.
Sonal: How was the initial response to Foodpanda?
Kiren Tanna: We got a lot of traction. In our research we had realized that the market was already there and lot of people were ordering food. The standard for ordering was and to a great extent still is on the phone. It is this switch from phone to online channel that we enabled through our websites. Apart from boutique specialty restaurants, we were also able to partner with a lot of big names. The initial response was quite encouraging and in the last few months we have also added a lot of big names such as Pizza Hut, Dominos, Pasta Mania, KFC, you name it and we have added it to our site and the list will only become more and more extensive as we go ahead.
Sonal: How did you come up with the name Foodpanda?
Kiren Tanna: We wanted to associate food with something that is perceived as comfortable… we discussed various food related options, until we came up with foodpanda. The name sounded catchy. When we tested it out we realized that it had a huge recall value and it was quite easy to remember as well. What’s more we had a readymade idea for the mascot in the name itself. We have a very cute panda as our mascot. We tested the younger and older looking panda, and the younger panda became a hit so we stuck with that. But, the name has caught on, not only in Asia, but also in other markets, and it helped us tremendously in our growth.
Sonal: The core proposition of Foodpanda was to offer a platform for online ordering across a choice of restaurants at one go. However, customized delivery system of individual restaurants was in existence. Did you ever think Singapore was too small a market?
Kiren Tanna: While I agree that Singapore is a small country with relatively tiny population, especially when you compare it to Indonesia or Malaysia. However, two main points make Singapore an interesting market to be in.
One, Singapore is an extremely important and vibrant e-commerce market. The population in general is very technology savvy and e-commerce friendly. In our research we realized that majority of them have tried shopping online, a lot of them own credit cards or online payment friendly cards.
In fact, you would be surprised to know that a total of approximately 100,000 food orders of different kinds are delivered everyday.
Second, people are willing to spend here. The average order on Foodpanda Singapore is around S$ 50.
Sonal: Considering there were some existing platforms for food ordering, did you consider the acquisition strategy rather than greenfield?
Kiren Tanna: So we considered both greenfield and acquisition strategy. We have largely gone by setting up our own operations because it ensures better control over the entire situation. Plus, in most countries including Singapore, the competition was actually quite small and while it could have given us a bit of a kick start, it did not justify the spending we would have had to do. Having said that, we definitely try to partner with other local players. For example, in Singapore we partnered with Singapore Dine. We saw a mutual fit in what we could do and what they could do and so we started to work together. Foodpanda in Russia and Brazil and couple of other places has acquired local competition. So yes, we do keep an eye out for such opportunities all the time.
Sonal: Did you have a segmentation of customers when you started out?
Kiren Tanna: One major chunk here turns out to be working professionals during lunch time.. Especially during bad weather days. A lot of our orders come from areas where food options are not available or easily accessible. Especially where local food courts shut down early.
Second category included working women who haven’t managed to put together dinner due to a delay at work. Homemakers who want a day off from cooking made up a large segment too. Especially for bulk order on weekends for say a party or when guests are visiting.
Lastly, our orders come from the single guys and girls…
Sonal: Considering Singapore is huge expat market, did you have segmentation on that basis?
Kiren Tanna: We never systematically made such a segmentation, but I am happy to say that we have a very balanced customer base between locals and expats, almost 50-50.
Sonal: How do you shortlist restaurants? Do you have a specific criteria that the restaurants need to meet to get listed on foodpanda?
Kiren Tanna: Yes. We do analyse a restaurant in terms of the quality of food and whether they have infrastructure and capacity to deliver food in the stipulated time. The food delivery part becomes especially critical during the weekends when their walk-in load would be more. In testing the quality of food, we definitely pay a lot of attention to customer reviews. We also do mystery shopping ourselves by ordering in food.
Sonal: Considering the fact that you are neither involved in quality of food nor the actual delivery, how do you deal with customer complains?
Kiren Tanna: We have an extensive and efficient customer service network in house in form of call centers. For specific complains, at times, we also connect the restaurant directly to the customer. If we realize it is a blatant fault, we have reimbursed the customers in the past. While its largely the restaurants delivering the food,, we do intervene to ensure customer satisfaction, as it is a joint effort at the end of the day and a poor experience effects both us and the restaurants.
Sonal: At this point in time, how many restaurants have been enlisted with foodpanda.
Kiren Tanna: We have more than 200 restaurants with us.. As I said earlier, we are very strict in monitoring delivery performance. So we have actually declined50 to 60 restaurants for poor infrastructure and in future we will continue to add the good ones and weed out the ones that do not deliver the required quality.
Sonal: Where does foodpanda Singapore go from here? You have been here for year and half now, and have captured a huge chunk of the market already. What next?
Kiren Tanna: In Singapore, yes, we have pretty much signed up all of the major restaurants we wanted to. We are chasing a couple of big names and hopefully over a period of time we will expand further. But for now, we have a decently comprehensive list here.
For other markets, different countries are in different stages of growth. But overall the major focus is to expand and reach more cities within those countries. We are doing extremely well in the bigger cities, but there are aim is to reach to the number 1 spot in food delivery.
In Asia we are now also looking at expanding to new countries.
Sonal: Let’s talk a little bit about you. What was your journey like till you came in as CEO, Asia for Foodpanda.
Kiren Tanna: I have been in Singapore for the past six years. My move from India to Singapore happened after I was recruited by McKinsey & Company, which is a global consulting firm. I come from Mumbai which is a food loving city. I like to eat and I like to explore new places. In fact, during my stint in McKinsey, I was fortunate to travel to all the continents across the world and was actively participating in the local food scene. Foodpanda as a concept is very cool. Plus, for me it was a once in a lifetime opportunity to venture out and become an entrepreneur myself, which such a renowned investor to back up and a concept that I truly believed in.
Sonal: In your stint at foodpanda and even before, you have been to hundreds of restaurants, small and large, across the globe… what according to you differentiates an average restaurant from a good restaurant, and what is it that makes them brilliant.
Kiren Tanna: Number one is of course quality of the food. But I wouldn’t stop at that. For me a good restaurant is the one that serves me good quality food. A brilliant restaurant for me is the one which can surprise me, not just with good quality food, but little bit of innovative and creativity as well. Does the dish excite my eyes as well as palate…
Further, I think restaurants today largely ignore marketing.. I still remember, about two years ago, I had been to this restaurant in India, and I received a simple Happy Birthday email from them with an invitation for dinner and an added discount coupon. Whenever I am in India, I make it a point to visit this place.
Sonal: Finally, any tips / suggestions for F&B entrepreneurs?
Kiren Tanna: It is a very interesting industry. No matter where you are, today there’s a market. Another important point is, there is loads to be done in this space. Online food delivery when we started out was a segregated market with no real formal platform. Similarly, there are many such grey areas yet unexplored and this industry is only going to get hotter. The best suggestion I can give right now is to hunt for the golden nuggets.