Page 33 - Layout 1

BUSINESS REPORT

with third parties that have a large number of
FOOD APP PENETRATION IN VIETNAM CLOUD KITCHEN PLAYERS
users, cloud kitchen operators must pay quite
Food delivery penetration was 51% of respondents. The main players are Grab Food, high fees, leading to lower profits. The current
Now, Go Food (GoJek), and Baemin trend is therefore to combine both options.
Mr. Tung also noted that cloud kitchens

Delivery app penetration Delivery food apps in use
face certain difficulties, including the habit of
eating at home or dining at restaurants, and
competition among food apps. Some challenges
are fading, however, because of major players
entering and educating the market, resulting

in ordering via apps growing in popularity.
Competitive density on food apps is strong,
but professional sellers are actually few. “Success
62% 82% 73% 73%
46% 46% will come to those who do it well, and that is
the strength of cloud kitchens,” he said.
14%
In keeping with global trends, he went
Grab Food Now Baemin Go Food Loship on, the cloud kitchen model will grow further
Online food delivery Online food delivery /GoJek
user ratio app user ratio in Vietnam. “But the weakness of some cloud
kitchen developers is a lack of resources,” he
explained. “Successful cloud kitchens require
Q. Did you order food or drinks online in the last 60 days? (N=1046) / How do you order food and three resources: sufficiently-strong finances,
drinks online? (N=652)/(Delivery app) What apps do you use to order food? (N=532)
an understanding of technology, especially
Source: Q&Me, Dec 2020 food apps, and an understanding of the F&B
business, especially delivery.”
it has provided a more affordable business than 30 per cent in the years to come, gaining Chef Station does not have many direct
alternative to restaurants in terms of lower more than 20 million active users. This is a competitors, according to Mr. Giang, because
rentals and set-up costs. Rather than threat- substantial opportunity that investors as well the model is too new for the local F&B business.
ening the development of traditional restau- as F&B businesses can scarcely ignore.” But the challenge of doing business effectively
rants, cloud kitchens play a more comple- in terms of profit remains, because attracting
mentary role, especially for established players Barriers to expansion customers to use Chef Station’s online pur-
with existing consumer awareness who wish Assessing the fit between the cloud kitchen chasing channel requires that its team develop
to expand delivery services further. model and a player’s business is critical, because a sound technology ecosystem that is easy to
With four locations across Ho Chi Minh not all players will benefit from the concept, use and suitable for Vietnamese consumers.
City, GrabKitchen is strategically located to according to Ms. Chandrasekar. “It is more Products must also be compatible and sold
link consumer demand with food selections challenging for newer, emerging brands that at a better price than competitors. %
while reducing delivery times, thus bringing don’t have existing brand awareness in the
benefits for all involved. It offers a business market and want to start out in a cloud kitchen,” CLOUD KITCHEN PLAYERS

solution with optimal cost and minimal risk, she said. “Moreover, incumbents like Grab,

especially for micro, small and medium sized which is among the leading operators of cloud

enterprises (MSMEs). kitchens in Vietnam and Southeast Asia, present
Cloud kitchens are a new concept in Viet- significant competition to other delivery players FoodNgon Chef Station Deliany

nam, and this means it is necessary to spend or restaurants planning to open cloud kitchens.”
more time educating merchant-partners on The challenge is obvious to all restaurants, as
their potential. “We believe GrabKitchen it is necessary to understand that the cloud
value-adds to both consumers and merchant- kitchen is a model serving customers through
partners,” said Mr. Ma Tuan Trong, Head of online ordering combined with delivery services, GrabKitchen Tasty Kitchen
Food & Mart at Grab Vietnam. “For con- Mr. Duong from Dcorp R-Keeper emphasized.
sumers, it provides them with more food Thus, the challenges lie not so much in location

options and speedy delivery. For merchants, but in the combi-
it gives them a low-cost and low-risk way of nation of online
expanding to new locations and serving a business and deliv-
growing base of consumers who prefer deliv- ery. Cloud kitchen
ery for its convenience. For our business, restaurants must

GrabKitchen is one way that enables us to build sales apps and

continue expanding our selection of great websites or use an
quality food options at affordable prices while available app from

driving more sales to merchants.” partners such as

Because of its large market potential, Mr. Grab, Now, Baemin,

Hoang Tung, President of the Royal Food JSC or Gojek. Building
and Founder of Pizza Home, assumed the their own channel
cloud kitchen model has a lot of cash flow, will cost a lot of time
from the actual business, sub-leasing of prem- and money without
ises, kitchen rentals, and training provision. an available cus-
“The local food order market now stands at tomer portfolio.
$200 million and is expected to grow more When cooperating
APRIL 2021 | VIETNAM ECONOMIC TIMES | 31