Cloud kitchens a promising food delivery concept for Southeast Asia

Cloud Kitchens A New Food Delivery Concept For Southeast Asia

A new concept of food delivery is picking up traction in Southeast Asia: Delivery-only kitchens, or so-called “cloud kitchens,” which operate straight from individual cooking venues, including street food vendors, to the front door of a customer.

Cloud kitchen (also: “ghost” or “dark” kitchen) is a term to describe restaurants with no retail, geared to only deliver food. Here, chefs are hired to prepare meals in a central place before shipping them out to customers. Europe’s food delivery service Deliveroo has begun with building such shared-kitchen services for chef startups who wish to venture into the food delivery services in the past years.

The elimination of customer seating, air conditioning and lighting slashes rent costs and bills and also reduces the need to employ serving staff. All these reductions earn for itself the better economies of scale, while catering to consumer preference.

In Asia, India’s budget hotel startup Oyo began earlier this year to open over 20 cloud kitchens in Gurugram and Bengaluru to enter the foodtech business. Currently, these cloud kitchens are cooperating with Swiggy, Zomato and UberEats for delivery.

In Southeast Asia, GrabFood with its GrabKitchen concept is the front runner in Indonesia, Vietnam and soon the Philippines, while GoFood from Indonesia, Grain from Singapore and Dahmakan, a Malaysia-based food company, also use this business model.

Grab recently announced that it will operate more than 50 cloud kitchens across Indonesia by the end of this year. To identify potential locations and vendors, GrabFood tech and operation teams conduct an in-depth analysis about users’ travel and dining patterns based on collected data.

The concept also addresses street food vendors who operate a stall but typically prepare food that is then picked up and distributed by delivery drivers instead of being served to customers on-site which would increase the income stream of a food vendor. It also uses food court-like places without indoor dining facilities where individual chefs prepare their meals for delivery after digital orders come in. This set-up allows users to order food from different sellers in a single transaction since orders are picked up from one address. It also helps food vendors to grow their business since Grab shoulders rental fee for slots in GrabKitchen.

GrabKitchen is now even exploring a dine-in concept for its cloud kitchens and will observe the market response.

A Forbes article this September cited market research firm Frost & Sullivan which says that the global online food delivery service sector is expected to grow to a $200-billion market by 2025 as digital food orders are replacing the habits of having a quick lunch in a food stall near the office or heating up a frozen dinner.

North America is already host to more than ten online food delivery companies with Grubhub, the largest player, accounting for over a one third share of the market. Europe also has over ten providers, with Dutch company Just Eat having a presence in eight countries in the region, and an over 83 per cent share of the UK market. Worldwide, UberEats has a presence in more than 670 cities on six continents, and delivers almost a billion meals every year. and is also expanding in the cloud kitchen market.

But in terms of sheer numbers, Asia accounts for a massive 55 per cent share of the global online food delivery market, mainly thanks to China which alone registered over $34 billion in online food delivery revenues in 2018, with two of its biggest players being Ele.me and Meituan Dianping. Southeast Asia with its insatiable appetite for street food is the next success story to follow.

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A new concept of food delivery is picking up traction in Southeast Asia: Delivery-only kitchens, or so-called “cloud kitchens,” which operate straight from individual cooking venues, including street food vendors, to the front door of a customer. Cloud kitchen (also: “ghost” or “dark” kitchen) is a term to describe restaurants with no retail, geared to only deliver food. Here, chefs are hired to prepare meals in a central place before shipping them out to customers. Europe’s food delivery service Deliveroo has begun with building such shared-kitchen services for chef startups who wish to venture into the food delivery services in...

Cloud Kitchens A New Food Delivery Concept For Southeast Asia

A new concept of food delivery is picking up traction in Southeast Asia: Delivery-only kitchens, or so-called “cloud kitchens,” which operate straight from individual cooking venues, including street food vendors, to the front door of a customer.

Cloud kitchen (also: “ghost” or “dark” kitchen) is a term to describe restaurants with no retail, geared to only deliver food. Here, chefs are hired to prepare meals in a central place before shipping them out to customers. Europe’s food delivery service Deliveroo has begun with building such shared-kitchen services for chef startups who wish to venture into the food delivery services in the past years.

The elimination of customer seating, air conditioning and lighting slashes rent costs and bills and also reduces the need to employ serving staff. All these reductions earn for itself the better economies of scale, while catering to consumer preference.

In Asia, India’s budget hotel startup Oyo began earlier this year to open over 20 cloud kitchens in Gurugram and Bengaluru to enter the foodtech business. Currently, these cloud kitchens are cooperating with Swiggy, Zomato and UberEats for delivery.

In Southeast Asia, GrabFood with its GrabKitchen concept is the front runner in Indonesia, Vietnam and soon the Philippines, while GoFood from Indonesia, Grain from Singapore and Dahmakan, a Malaysia-based food company, also use this business model.

Grab recently announced that it will operate more than 50 cloud kitchens across Indonesia by the end of this year. To identify potential locations and vendors, GrabFood tech and operation teams conduct an in-depth analysis about users’ travel and dining patterns based on collected data.

The concept also addresses street food vendors who operate a stall but typically prepare food that is then picked up and distributed by delivery drivers instead of being served to customers on-site which would increase the income stream of a food vendor. It also uses food court-like places without indoor dining facilities where individual chefs prepare their meals for delivery after digital orders come in. This set-up allows users to order food from different sellers in a single transaction since orders are picked up from one address. It also helps food vendors to grow their business since Grab shoulders rental fee for slots in GrabKitchen.

GrabKitchen is now even exploring a dine-in concept for its cloud kitchens and will observe the market response.

A Forbes article this September cited market research firm Frost & Sullivan which says that the global online food delivery service sector is expected to grow to a $200-billion market by 2025 as digital food orders are replacing the habits of having a quick lunch in a food stall near the office or heating up a frozen dinner.

North America is already host to more than ten online food delivery companies with Grubhub, the largest player, accounting for over a one third share of the market. Europe also has over ten providers, with Dutch company Just Eat having a presence in eight countries in the region, and an over 83 per cent share of the UK market. Worldwide, UberEats has a presence in more than 670 cities on six continents, and delivers almost a billion meals every year. and is also expanding in the cloud kitchen market.

But in terms of sheer numbers, Asia accounts for a massive 55 per cent share of the global online food delivery market, mainly thanks to China which alone registered over $34 billion in online food delivery revenues in 2018, with two of its biggest players being Ele.me and Meituan Dianping. Southeast Asia with its insatiable appetite for street food is the next success story to follow.

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