Food delivery firm delivers on growth


  • SMEBiz
  • Monday, 11 Nov 2019

Timely delivery: DeliverEat tries to ensure that the food reaches customers within 45 minutes from the time they place their orders online.

FOOD delivery outfit DeliverEat is expecting revenue to double this year as more consumers cosy up to the idea of having their meals delivered to their doorstep.

In line with the expanding market, the company is expecting a compounded annual growth rate of 23.2% for the 2019-2023 period.

According to a Statista on-line food delivery survey for Malaysia, the revenue of the online food delivery segment is expected to hit US$145mil (RM599mil) in 2019.

DeliverEat founder and chief operating officer Leong Shir Mein says the business is booming mainly because food delivery is gaining wider acceptance as people are starting to experience the convenience of the process.

“Initially, people were wondering whether there was such a need for this business as restaurants and hawker stalls can be found in every corner in Penang.

“Eventually, they saw the convenience of having food sent to their homes. They then realised that food delivery services save you the time to drive out to eat, as you could face problems with finding a parking space or you may get caught in a traffic jam, ” she says.

The growth in business has enabled the Penang-based company to also expand into the central region. Leong says the company is now delivering 8,000 meals a day in the Klang Valley and Penang. She estimates that the current market size of the food catering business is about RM5mil daily.

“Each person spends at least RM10 nowadays for a meal, ” she notes.

She adds that the market education carried out by various food delivery players over time has also changed trends among consumers.

“Initially, people thought that we could only deliver fast food such as burgers, pizzas and fried chicken.

More eateries: Leong says the number of restaurants in its network will double over the next 12 months.More eateries: Leong says the number of restaurants in its network will double over the next 12 months.

“Now they realise that we deliver for more than 2,000 restaurants, and we can also deliver for hawkers. The number of restaurants will double over the next 12 months, ” she says.

Presently, DeliverEat has 400 riders serving the Klang Valley and Penang.

“We plan to extend our food delivery services to other states in the peninsular and also to East Malaysia in the near future.

“We also cater for corporate functions and parties, ” she adds.

DeliverEat tries to ensure that the food orders reach customers within 45 minutes from the time they place their orders online via its website. Customers can track the status of their orders by logging on with their order identification codes at the website.

Leong says when the company started in 2012, the number of daily orders for the lunch hour alone was around 15. At that time, it was more focused on the working crowd in offices and factories.

“Each order would be around RM70, which serves four to five persons, ” she says.

With more choices available to consumers these days, food outlets are looking for options to reach a wider group of customers beyond just their physical location. However, Leong notes that many of them were unable to do so because they did not have a delivery team.

“Our strategy is to get more restaurants and food outlets that provide different cuisines to appoint us as the delivery agent, ” she says.

When restaurants engage the services of DeliverEat, they are able to save on investments to provide their own delivery services, which Leong says would require an initial investment of at least RM6,000, inclusive of wages and motor-cycles.

“Furthermore, they also have to consider the cost of advertising their delivery services in the media.

As for restaurants that already have their own delivery team, the strategy is to “secure orders from our customers for them”.

DeliverEat was established in 2012 with a RM150,000 conditional grant from Cradle Fund, an agency under the Ministry of Finance.

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