F&B

We’d Like To See This M’sian Startup Survive In The Food Delivery Biz, But Boy, It’ll Be Tough

Author’s Blurb: It’s safe to say Malaysians are quite spoilt for choice when it comes to food deliveries. We have so many apps to choose from that we probably have several of them downloaded to cross-check prices for the best deal in terms of overall meal cost.

Packed, a food delivery and pickup service, was created to make things easier for street food vendors when it came to food deliveries. 

The idea for Packed was conceived during a casual Saturday meetup over burgers. Cha En and Amirrul noticed that food vendors faced some problems when it came to food deliveries.

“We noticed that most street food vendors manage their orders via Whatsapp and Facebook Messenger (which is cumbersome) and made payment via cash, and sometimes customers might not show up at the end and the merchants need to bear the loss,” said Cha En, the co-founder of Packed. 

“We believe that we have a responsibility to provide a working solution that can support the business of small and micro food vendors.”

Exclusivity Isn’t Welcome Here

When you think “street food”, you think hawker stalls that sell homely dishes such as kuey teow and chicken rice, or roadside stalls that serve local favourites such as cendol, apam balik, or Ramly burgers

Scrolling through the mobile app, however, I got the impression that a number of these restaurants didn’t fall under the category of what you’d normally consider street food. 

The array of restaurants that Packed showcases include places like small cafes, boba tea shops, Western-style steakhouses, and burger joints.

“To us, we try not to limit or gatekeep the definition of street food vendors,” Cha En explained. 

“They could be a home based seller that sells Grilled Chicken Pasta from her home, a street burger vendor, or a startup small cafe owner. The rough idea is their operations are small and can benefit from Packed.”

Some of the street food vendors already using Packed / Image Credit: Packed

In order to be part of Packed’s delivery services, restaurants are first required to undergo a registration process, which will confirm important things such as their business verification, whether they’ve gone through training in food handling, and if they’ve been medically examined. 

There are around 120 vendors working with Packed, and the team has plans to get more on board by spreading awareness through social media and one-on-one interactions.

Obstacles To Tackle

“But aren’t there already established food delivery services such as foodpanda and GrabFood?” you might ask. “What’s special about Packed?”

Indeed, the food delivery service industry in Malaysia is pretty saturated, and the players mentioned are also able to cater to street food cravings.

Furthermore, loads of new players are making their way into the market, with logistics and car-sharing startups wanting a piece of the pie too.

Cha En, however, believes that the uniqueness of Packed comes from the benefits that their vendors enjoy.

“Packed allows vendors to take charge of their food business; edit menu from their smartphone, open or close their operation temporarily, enable call reminder notification,” he explained.

This means vendors aren’t dependant on the platform itself to update necessary details, and any updates can be reflected immediately without delay.

Unlike the 30% sales commission fees larger platforms may charge, Packed charges a 5% sales commission fee plus a 3% online payment processing fee.

For new merchants registering during the RMCO, Packed is offering a 0% sales commission (excluding the online payment processing fee).

Packed does not operate its own fleet of delivery riders, and instead outsources deliveries to third-party logistics startups like MrSpeedy and, soon, BungkusIt.

What ordering on the app looks like

Thus for customers, the delivery fees may be slightly higher than what you’re used to on foodpanda or GrabFood.

We foresee that this might actually be a big problem for Packed when it comes to customer acquisition, particularly for their target market of Malaysians who want cheap street food.

If I were to use the app to order food that’s under RM10 and I get hit by a delivery fee that’s equivalent to, or higher than, the cost of my meal, you can bet that I wouldn’t make the purchase.

Based on what we can observe thus far, Packed offers vendors an attractive proposition, but not every customer may be able to benefit from Packed’s services.

In the end, if Packed is unable to acquire customers, the vendors won’t get anything out of it either.

Better Deals For Vendors & Customers

Packed is currently focusing on converting its user base (situated mainly around Klang Valley) into beta testers, who can provide feedback on how they want to use Packed. 

Hopefully, this will give the team more insight on how to better the customer experience.

Despite the challenges that Packed has faced due to the saturated market, Cha En also expressed firm plans on pushing forward. 

“Packed is also emphasising on helping local F&B merchants to increase dine-in/walk-in sales by launching a discount listing feature called Packed Promo%,” Cha En stated. 

“Business merchants can list their dine in discount with us for free of charge, while users can search nearby deals and get discounts when dining in.”

Bottom Line: While Packed’s motive is good, I believe that they’ll need to put in lots of effort and work to rise above the other food delivery businesses. As a customer, being spoilt for choice is good, but it can also be overwhelming, and I might just resort to using a service that I’m already familiar with.

  • You can read more about other Malaysian startups here.

Featured Image Credit: Packed

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