“Prior to MCO, we signed up with GrabFood because they have a huge database that we can tap into and we didn’t have a huge social media following to begin with. But in the long run and in times like this, it eats significantly into our margin,” he said.
Not all restaurateurs are against the high commission rates charged by food delivery platforms. Some, in fact, see value in the revenue-share model between food delivery platforms and its merchants.
“You still have to pay wages, rental and everything else. And there is no cash flow. Although I’m hitting below my breakeven mark, I’m not losing as much money compared to someone who is not opening for business at all,” says Chin.
Southeast Asia’s food delivery industry has generally experienced higher order volumes as people have been locked in for weeks, if not months. In Thailand, food delivery companies are on a hiring spree to meet surging demands. The Philippines and Indonesia have also seen food delivery orders jump in the past few weeks.
As of 21 April, almost 25% of food deliveries were completed by its car-based service GrabCar drivers. Grab has on-boarded 40% more F&B merchants on its platform compared to its previous monthly average, which was not disclosed by the company.
While the demand is just as high in Malaysia, the supply of riders has become an issue. F&B business owners that We spoke to said sometimes riders take longer to arrive and their delivery radius has been shrunk due to rider shortage. On 17 April, the Malaysian government ruled that all food delivery riders must be screened for Covid-19, which may worsen the shortage of riders.
In an email reply to us, Grab said it recognised that its partners’ dine-in revenue is greatly affected, as are the businesses that have to rely on GrabFood during the MCO period. Grab claimed it has mobilised over 100,000 drivers to support the increased delivery demand in this time. The “majority of the commissions”, it said, are channeled to support its delivery partners as income.
We also reached out to foodpanda Malaysia with a list of detailed queries but did not receive a reply.
Making a beeline for Beep
Malaysia-based omnichannel point-of-sale system provider StoreHub saw an opportunity to lend a helping hand to its F&B customers during the MCO period.
There are two sides to the argument: one side argues that these platforms act as a one-stop centre for merchants, from marketing to the point of taking orders to having it delivered to the doorstep of consumers; the other side says that such steep fees are simply a marketing budget that business owners cannot afford during this period.
myBurgerLab, which has six burger joints located across Kuala Lumpur and Selangor, is relying heavily on food delivery to sustain its business. Doing so has helped control losses, says co-founder Renyi Chin.