The battle for market share among food delivery services has heated up in Hong Kong. Major players such as Foodpanda, Deliveroo and UberEats are in a race to partner with the most ubiquitous eateries.
Deliveroo general manager Brian Lo recently sat down with the Hong Kong Economic Journal to discuss the opportunities and challenges in the market, and how his company hopes to win the battle with a localization action plan.
HKEJ: How would you compare the food delivery service in Hong Kong and mainland China?
Lo: I recently visited Shanghai and I was amazed by the market there, which has started to mature with a well-established service and a high concentration. To me, Hong Kong is still slightly behind mainland China in the food delivery service.
Having said that, the Hong Kong market has evolved a lot in the past decade. Consumers are now dependent on app-based food delivery service, thanks to the new players entering the market, which are launching promotion campaigns and making waves on the city’s culinary landscape.
From what I understand by market figures, the overall volume of food delivery service in the city grew by two- to five-fold from 2015 to 2016, and it would likely grow by five- to 10-fold this year.
HKEJ: With the growing popularity of food delivery in the city, how do you recruit more riders?
Lo: Deliveroo would like to attract more young people to join us, as well as people from all walks of life, including housewives. We need manpower at the lunchtime peak, particularly in areas such as Central and Tsim Sha Tsui.
I can’t tell you the riders’ actual earnings, but since we launched in Hong Kong, their overall earnings have tripled, about two to three times the minimum wage.
HKEJ: Common complaints by customers are the long delivery time and missing orders. How do you address these issues?
Lo: We are the only food delivery platform that features a 24-hour customer service team to monitor and handle complaints. Unlike other food delivery players, our CS team is constituted by locals. Apart from the advantage that they can communicate with consumers and restaurants in fluent Cantonese, they are also familiar with the local streets and locations. That’s how we speed up our delivery service and handle problems better.
We now have 30 to 40 customer service officers to answer incoming calls during peak hours. In case of a missing order, we would urge the restaurant to deliver once we receive a request from the customer; if we receive a refund request, we would process immediately and notify the restaurant afterwards.
HKEJ: How long would it take for the food to get delivered?
Lo: The average delivery time of Deliveroo Hong Kong has been maintained at 32.1 minutes since launch. Once the meal is prepared, we aim to make it to customer’s hands within 10 to 15 minutes.
HKEJ: How do food delivery startups make use of the advent of technology?
Lo: Take Deliveroo as an example. It is much more than a food delivery service company; it is a technology company building the platform. About half of our 2,000 employees are IT engineers or product managers; we also have plenty of professionals with PhD in Mathematics.
Let’s look at our real-time delivery tracking feature. Based on previous figures, we can predict the road traffic in the delivery area as well as the customer traffic at respective restaurants, so that we can produce an accurate estimate of the delivery and processing time. We are using technology in a way that addresses consumer needs.
HKEJ: We know that Deliveroo is building its own “central kitchen” facility. Can you tell us more about this new strategy?
Lo: We built our first central kitchen in Wan Chai last month, and for the local restaurants operating a station on the premises, food can be delivered quickly from that location.
Each space provided to restaurants is fitted with required facilities, so we offer a low-risk way to help local restaurants expand their operations, saving significantly on overheads.
Restaurant owners who work in Deliveroo’s kitchen also benefit from our customer data findings such as consumer preferences by region.
This article appeared in the Hong Kong Economic Journal on Nov. 10
Translation by Ben Ng
[Chinese version 中文版]
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