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Start-ups

Deliveroo launches kitchen concept to help restaurants expand delivery reach

The concept also allows restaurant owners to try out new ideas with lower start-up costs

PUBLISHED : Wednesday, 27 September, 2017, 8:02pm
UPDATED : Thursday, 28 September, 2017, 9:24am

Food delivery company Deliveroo has launched a delivery-only kitchen in Hong Kong, allowing restaurants to operate off-site kitchens that cater to more customer bases across the city.

Dubbed “Deliveroo Editions”, the kitchen concept is located in Wan Chai, and currently houses six popular restaurants on the Deliveroo platform.

Each restaurant is allocated an amount of space in the kitchen, which Deliveroo has fitted out with stoves, fridges and other cookware. This means that restaurants only need to invest in manpower and the ingredients needed, without the capital risks of renting their own kitchen space.

In return, Deliveroo takes a commission from the orders placed with the restaurants on Deliveroo Editions.

Brian Lo, general manager of Deliveroo in Hong Kong, said that the company had amassed a trove of data on customers’ order preferences within each area.

Based on this data, Deliveroo Editions can bring in restaurants for specific cuisines that are in demand, and restaurants who operate out of Editions can also refer to the data to determine if it makes commercial sense to open up a new kitchen to serve another base of customers that are normally out of its delivery range.

“We have the actual big data to back up our assumptions, we know what’s going to be successful or not within an area based on past purchasing patterns,” said Lo, adding that certain restaurants in Singapore and London which already operate out of Deliveroo Editions have seen an increase by as much as 500 per cent in revenue.

Italian restaurant 208 Otto Duecento is one of the six restaurants operating out of the Deliveroo Edition in Hong Kong.

Yenn Wong, chief executive of JIA Group, which owns 208 Otto Duecento, said that the set-up gave the restaurant a chance to reach customers in Wan Chai, an area they previously could not service as the restaurant was located in Sheung Wan.

“It’s cost-effective because Deliveroo built the kitchen, other than the labour and ingredients and boxes, we don’t have any investment involved. It’s a shared risk situation, if we don’t sell well, Deliveroo doesn’t benefit either,” said Wong, who said that the costs of building a kitchen in a restaurant could easily range from HK$600,000 (US$76,817) to over HK$1,000,000.

It’s a shared risk situation, if we don’t sell well, Deliveroo doesn’t benefit either
Yenn Wong, JIA Group

The Deliveroo Editions platform also gives restaurant owners the possibility to try out new restaurant concepts, Lo said.

Stephanie Kudus, who operates the popular Hawaiian poke stores Pololi in Hong Kong, is using Deliveroo Editions to trial out “Blazed by Pololi”, which serves up barbecued meats, as well as “Kai by Pololi” which allows consumers to customise their poke bowls.

“With lower start-up costs, we’re able to take on higher risks as a business,” said Kudus.

Lo said that the kitchen in Hong Kong was the first of a chain of Deliveroo Editions to come.

“We aim to ensure that the restaurants will make a healthy margin from [operating with Deliveroo Editions]. We are investing [heavily] into this initiative because ultimately, we see the Deliveroo Editions concept as a long-term trend in the food and beverage industry.”