Friday, 22 August 2014

Grabbing a slice of a hot market

PIZZA deliveries may soon be a thing of the past as a Malaysian-based company aims to make express pizzas available to the locals.

The team behind Pizzalicious Sdn Bhd is in the business of manufacturing pizza vending machines that dispense warm, ready-to-eat pizzas in minutes.

The company’s Pizzalicious Vending Machine creates nine-inch pizzas three minutes after payment, using raw ingredients including flour, cheese, oil and water.

Vending machines of all kinds are already popular and found globally. Depending on which part of the world one is in, these machines can dispense a variety of products.

According to a report by The Telegraph, some vending machines can churn out bread (France), live lobsters (Japan) and cupcakes (Los Angeles, US).

There is even an ATM in Dubai that dispenses gold bars, according to CNN.

Harlinda (left) with Pizzalicious Sdn Bhdâ¿TMs marketing executive Zuhairy Mohd Zubir and staff at their warehouse in Batu Caves.
Harlinda (left) with Pizzalicious Sdn Bhd’s marketing executive Zuhairy Mohd Zubir and staff at their warehouse in Batu Caves.

While such machines have yet to reach our shores, Pizzalicious aims to revolutionise fast food by providing quick, tasty meals to Malaysians at reasonable prices.

Food from machines

Founded by Ku Addy Fazly Ku Radin, the company was incorporated in 2012 and introduced its machines last year at the Malaysian International Halal Showcase (Mihas).

Marketing director Harlinda Halim said the company was previously involved in water vending machines before venturing into the express pizza-making business.

Seeing the popularity of pizzas in Malaysia, the team decided that the express pizza business was worth exploring.

“Pizza vending machines are nothing new and have already been operating overseas for some time,” said Harlinda.

Pizzalicious operates using a licensing model and the machine purchasers, or licence holders, are subjected to a licensing agreement.

After the purchase of a machine, the licensee owns the machine and is obligated to the terms and conditions of the licensing company.

According to Harlinda, the business model follows what is done overseas while the vending machines themselves are assembled by the company’s team of engineers and designers.

A total of RM1mil was invested to start the company and the research and development process for the machines took two years.

Pizza is one of the most popular foods in the world and Pizzalicious is looking to tap that popularity in Malaysia.
The company recommends that the machines be placed in locations that operate 24 hours a day, such as hospitals and airports, for the licensee to generate good returns.

“We currently have 40 listed locations for licensees,” Harlinda said, adding that finding the right location for the machines would be the main factor for success.

The company recommends places that operate 24 hours a day, such as hospitals and airports, for the licensee to generate good returns, instead of shopping malls which generally operate 12 hours a day.

The team surveyed and identified the 40 locations that meet two criteria — areas that have high traffic and high security.

“The licensee can select any of these 40 locations that is right for them,” Pizzalicious marketing executive Zuhairy Mohd Zubir said, adding that they were open to proposals if none of the listed locations appealed to the licensee.

The marketing team would then survey the proposed location to see if they meet their criteria.


Zuhairy said one of the initial difficulties faced by the team was in getting the machines functioning efficiently.

“We have had many failures before this,” he said, adding that they are on their fourth prototype and had to do many upgrades in their machines.

The team even turned to YouTube for help.

“We would have a discussion with our engineers and designers as we had no source of reference,” said Harlinda.

“Previously, we hired outside expertise, but eventually decided to terminate their services and do it ourselves,” she said, adding that they had many problems when these parties could not deliver.

Currently, the company is producing two types of machines — one that makes pizza from scratch and another that cooks frozen pizzas in one minute.

The machines have communications links and can be operated through a remote management system, helping licensee holders know when to top up ingredients in the machines or to find out total sales for the day, all through mobile devices, including handphones and laptops.

Harlinda said while many were excited by the introduction of vending machines, others were sceptical about their viability.

“Malaysians like rice.

“Some people were not confident about the vending machines because they had never seen them before,” she explained.

However, she added that many Malaysians did enjoy pizzas.

“People are always busy and do not have time to dine in,” she said, adding that express pizzas offered a convenient alternative.

“We started marketing online, through Facebook and our website before starting to attend trade exhibitions,” said Zuhairy.

Some of the exhibitions that they have participated in include the World Innovation Forum Kuala Lumpur (WIF-KL) 2013, Halal Fiesta Malaysia (Halfest) 2013.

“The response has been overwhelming,” Harlinda said, adding that many foreigners, especially Middle Easterners, were expressing an interest in their vending machines.

To date, they have already pre-sold 20 units in Malaysia.

“For now, the machines are still in their production stage at the factory,” Zuhairy said, adding that they expected the vending machines to be operating in public towards the end of August.

The business concept is aimed at encouraging people to generate passive income by becoming a licensee of the company.

“Many people may play with property as a way to generate passive income, but becoming a licensee with us introduces a different way of generating income,” said Harlinda.

Each unit is priced at RM150,000.

She said while the sum may seem substantial to some, licensees of the vending machines could see approximately RM25,000 in monthly returns, based on the sales of 120 pizzas daily, helping licensees break even within several months.

However, this figure can depend on factors such as the area’s traffic, among other things.

Some of the costs that licensees need to bear include monthly rent, the prices of raw ingredients and the interest on loan, if the take one to acquire the machine.

The Pizzalicious Vending Machine can operate around the clock without workers, requiring limited effort on the licensee’s part. It takes approximately 15 minutes each day to top up ingredients or when needed.

The current version of the machine, which measures 6ft by 7ft by 3ft, can make four types of pizza — chicken, beef, tuna and cheese.

Other features include a built-in alarm that sends a signal to the owner’s handphone in the event of theft or damage.

Expansion plans

The Pizzalicious team’s current focus is to expand within the Klang Valley. Their target is to have 150 machines in operation by next year.

Other locations that they hope to penetrate include Penang, Johor and East Malaysia.

“We hope to expand the business throughout Malaysia before expanding overseas,” said Zuhairy.

“The machines are built to last,” said Harlinda, adding that each vending machine can dispense approximately 150 pizzas for each cycle.

The company’s plans include developing other pizza-related products such as pushcart called “ Pizzalicious Street” and also a “Pizzalicious Stand Up Kiosk”.

“For now, our focus remains the Pizzalicious Vending Machine that makes pizza from scratch and aim to increase its popularity,” explained Zuhairy.

“We feel the idea of turning raw ingredients into a hot pizza that is ready to be eaten, without having to go to a restaurant, offers promise in a fast-developing country like Malaysia.”

Tags / Keywords: Central Region , Pizzalicious Sdn Bhd , Pizza Vending Machine , Harlinda Halim

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