CEO Series

How To Get An RM7 Lunch Delivered In KL, Without The Pain Of Minimum Orders Or Delivery Fees

  • SmartBite is a food delivery platform founded in 2016 that focuses purely on the office crowd.
  • It eliminates minimum orders, delivery fees, and complicated menu options to make the process as simple as possible for customers.

Despite how tempting it is to get your meal sent straight to your office during peak lunch hours, it’s also often a turn-off when you have to go through things like minimum orders, delivery charges, and unpredictable delivery times.

These were the exact same things Gabriele Fadda of SmartBite pondered on when creating his food delivery service in 2016.

“When we first started SmartBite, we were motivated to create a model that was extremely efficient and convenient for people working in the office,” Gabriele said. “We started with a basic technology and we spent time on deep diving on the major pain points of working people.”

SmartBite’s food delivery platform specifically targets the urban office-worker demographic.

Gabriele revealed that despite there being a high interest in food delivery services amongst office workers, it all seldom translated into revenue due to the price points offered by providers.

“We realised our initial hypothesis was correct—in spite of a huge willingness to eat meals in the officer, working professionals were not using food aggregators frequently due to the price points,” Gabriele said. “They increase significantly once extra fees and minimum orders are included, and there’s unpredictable delivery timing, especially during peak hours.”

He went on to explain that they narrowed it down to two factors—affordability and timeliness—as key in whether or not customers used food delivery services. The majority of office workers within the Kuala Lumpur CBD also have similar food preferences.

All this led the SmartBite team to work on a technological solution to help all involved save time and money.

Take Out All The Complicated Stuff

SmartBite works via an AI-based system that’s able to curate a rotation of meals every single day. This is based on multiple criteria including customer preferences, rankings, and market trends.

They complement this further by making the whole ordering and delivery process as simple as possible, setting fixed delivery timeslots between 11AM to 8PM, with no minimum order or delivery fees.

This also allows restaurants to wield more control over the quality of their food by working on specific meals within the provided timeslots.In the end, this helps reduce costs and time-wasting, making it a win-win for both the customer and the restaurant.

All in all, Gabriele feels that compared to the mainstream model of food delivery utilised by other bigger brands, SmartBite’s model will in the long run prove far more sustainable.

Gabriele Fadda of Smartbite.

“We feel that the current model of on-demand point-to-point food delivery is unsustainable because of its high cost, delivery unpredictability and logistical efficiencies. This has led to pain points emerging throughout the value chain of restaurants as well as consumers.”

“By curating meals and delivering on a fixed time slot, this allows us to bulk-order food for single delivery personnel and save significantly on logistical costs.”

He explained that although the tasks themselves are more complicated and heavier to complete, they reduce the number of trips per day, which saves time and cost during peak hours.

The Harder But Better Way

But in an industry with a surfeit of variables, trying to grow a service like SmartBite hasn’t exactly been a walk in the park.

One of the biggest challenges faced by the team so far have been optimising their logistics.

“Having multiple pick-up points means our logistical model is complex and one that can’t be managed well without the proper technological infrastructure to support it,” Gabriele said.

“But we’re always seeking to better this feature because 60% of orders made are placed for multiple meals and a core function of SmartBite.”

“As such we’ve spent months fine-tuning our algorithms in areas such as routing optimisation.”

Additionally, Gabriele explained that they also faced challenges with meal variety, especially at the beginning when they leveraged on SMS instead of their current platform.

Image Credit: SmartBite

“Today, we use sophisticated data analytics to identify food preferences for different clusters of customers,” he said. “We also now see the path ahead in moving from menus developed based on clusters of customers to personalised menus for individuals.”

“The quality of data plays an extremely important role and is a cornerstone of our value offering—this is why we encourage our customers to share their food preferences with us so we can match them to others with similar tastes to curate the right menu.”

Proving Themselves Right

But so far, the team’s work towards making their model a success has paid off, with plenty of positive feedback coming through and business growing at a healthy pace.

Their milestones so far include the time they successfully delivered 1,200 meals in a single day (now they average 1,200 meals daily during peak hours), and their jump in revenue by 250% since the first half of 2017.

Currently, they have an active base of 20,000 users, have served over 3,900 offices, and have seen their new user signups increase every week with an 85% rate into first orders.

“We’re extremely delighted at what SmartBite has achieved thus far,” Gabriele said. “All this makes us extremely satisfied and motivated for the next phase of SmartBite.”

Having come this far, we then asked Gabriele: “What next?”

Google-Temasek’s e-Conomy report on Southeast Asia and a Statista report indicated only promising things for the food delivery segment in Malaysia, where there are currently over three million users and more than USD100 million in market valuation.

“As the Malaysian economy develops, new infrastructures are being developed and built,” he said. “This means that there’ll be more clusters of office buildings, and with that comes increasing density of working professionals in those areas.”

“As such, SmartBite is able to serve this segment accordingly, and for this reason it’s important to maximise our time so that we’ll be ready for this growth in the near future.”

As for SmartBite itself, Gabriele says that they expect to expand into another major city in 2019.

“We studied the market by abstracting the customers’ pain-points and finding commonalities to working professionals around the world,” he said. “Of course, culture remains the main challenge—every city in Southeast Asia has a unique culture and background that differs from one another, especially when it comes to food.”

“Nevertheless, we believe that Kuala Lumpur is a testing ground for us that will prepare SmartBite to face such challenges in the future!”

Feature Image Credit: SmartBite

 

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