The words ‘food’ and ‘delivery’ in Singapore immediately conjure images of people driving around on motorbikes representing one of two companies; Deliveroo or foodpanda (with Uber making a play in the space with UberEATS).
It is a competitive industry with each company having to work to provide low costs, interesting restaurants, fast delivery time and (most importantly) quality food.
Started by General Manager Tristán Torres Velat in September 2015, Deliveroo began serving food to Singaporeans on November 20, 2015. After nine months is has more than 2,000 restaurants on the platform island-wide.
Its boasts a fleet of 1,300 riders and 100 cyclists and, according to Velat, has been growing 25 per cent week-on-week.
At the Millennial 20/20 event in Singapore last week, e27 sat down with Velat to talk food delivery, business strategy and how he is trying to deliver food in under 15 (or even 10) minutes.
Below are the edited excerpts.
I think the average person kind of thinks of foodpanda and Deliveroo together…
So for me, I think we are completely different.
Because I have been living in Singapore for close to five years. The food delivery business in Singapore was not reliable, even with all the types of fast food, on Sunday night it was consistently [taking] one hour and 30 minutes.
What I believe is [before us] all the players in delivery took about 45 to 60 minutes.
We came here and we changed the food delivery business, and now everybody is delivering in 30 minutes.
But me as a GM, what I need to think about, is, ’30 minutes is good now, but what do I need to think about in two years?’
Maybe I need to deliver food in 15 minutes or in 10 minutes? So we are starting to work on a process that, by the end of the year, will deliver food in 20 minutes.
Can you get into the process a little bit?
One part is we are going to optimise the process of delivery.
But the second part is we are going to open centralised kitchens, where the restaurants are only going to be cooking delivery from there. That means they won’t have dining customers and can prepare the food 50 to 60 per cent faster than in their own restaurant.
And it will be the same branded food right?
Yeah, it is the same thing. I have the first one to be launched in October in East Coast. So it is five kitchens inside of a big building. Independent kitchens and they will be delivering from there. Which means I can deliver within 15 to 20 minutes.
The other thing is we are going to start delivering with bicycles in CBD (Central Business District). I am starting to do it with bicycles. I did the first 100 deliveries with the bicycle one month ago.
Myself. Yes. To make sure the process was perfect. And then we realised we can be 15 to 20 per cent faster than a [motorbike].
So, this is how I think. What keeps me awake up at night is, even if we have a market-leader position now, how we can literally own the whole market.
This is what we want.
That is a good segway. Is it a ‘winners-take-all’ industry? Or do you think you can co-exist with the others?
I think Singapore as a market is perfect; for the size, population, GDP, disposable income and convenience.
If you [look at] Singapore as a market, 5.5 million people. We assume that only 50 per cent of the people are eligible to buy online — because they use online, they have the credit card and they have the disposable income to use [Deliveroo].
[That leaves] about 2.5 million people and they can order food three times a day. Breakfast, lunch and dinner. And if you [include] all the players in Singapore, we are not even doing five per cent of the potential market.
We are not in the position of stealing market-share from one another. We are building a business, building a new market. We are market builders in Singapore.
Do some of the recent trends in food delivery, like foodpanda maybe pulling out of Indonesia, worry you or bother you at all?
Look, what foodpanda does is their problem. We know what we do [and it is not like] we are happy because they are pulling down.
In the end, we know what we need to do. We keep an eye on the competition but we are not obsessed.
It is really easy when you are building a business to start losing focus [and pay too much attention] to the competition, and this does not work. So when it comes to foodpanda — look they also have been doing a great job. They have been in Singapore for a long time.
So I usually do not comment on competitors because, just for being a competitor, you need to respect them.
What is the major hurdle in Singapore that you are trying to get over?
So for us, I think one of the biggest challenges we have is the rider-side. Finding more riders.
How do you do that?
We have different channels. We use digital, we do partnerships with motorbikes shops, we use different forums in Facebook, we use Gumtree.
And then we use our ambassadors, our own riders, and they bring their friends through our referral programme and this is a channel that really works.
I heard you speaking at the forum and thought I would ask the same question because it is a good one. When is too much data?
I think in the world we live, there is too much data. We have the tendency to just slap ourselves with data, but for me, we need to define the data that is going to make you better in your process.
Anything that is not going to make you better in the process, just get out. That means data regarding restaurants, riders and customers is where I need to focus.
Anything that is about other things is second level for me, so I define data as improvement of our current process.
If I spoke to you again this time next year, what do you hope has happened?
One of my dreams is to make sure every person in Singapore orders once per week. Minimum. This is where we are aiming.
I’m trying to build a sustainable business; I’m not looking for the growth. I’m just looking to make sure I become a lifestyle, that when you download the app, your app is going to be next to Whatsapp or Facebook because you are going to use it every single day.
And changing this mindset is not going to happen in 12 months, it is going to happen in four, five, six years. This is how we think at Deliveroo.