foodpanda latest to come full circle with dine-in restaurant

favourites by foodpanda offers customers dishes from nine different restaurants

Singapore

NO longer confined to just fashion e-retailers, established online businesses from various industries are fast coming on board to the idea of moving into the brick and mortar space.

The latest addition is food delivery company foodpanda Singapore, which announced the launch of its first 30-seater dine-in restaurant, named favourites by foodpanda, on Wednesday.

Located at 71 Woodlands Avenue 10, the 3,100 square feet (sq ft) restaurant offers customers a chance to pick and match dishes from nine restaurants, such as Ichiban Bento, Crystal Jade Kitchen and Wingzone.

At the same time, the restaurant acts as a collective kitchen, allowing customers in the nearby districts of Sembawang and Yishun to place delivery orders for the same nine restaurants under a single delivery fee.

Luc Andreani, managing director of foodpanda Singapore, said that there was a demand in the northern part of Singapore for more delivery options, but many restaurants are unable to deliver to them due to their more central locations.

He said: "favourites by foodpanda is a solution to this problem, offering brands an opportunity to expand output and reach a new customer base, while taking advantage of foodpanda's efficient infrastructure."

Experts agree that a physical store can benefit online businesses financially.

Lim Yun Fong, associate professor of operations management at the Singapore Management University (SMU) said that online businesses - be it products or services - collect data from customers.

He pointed out that these online businesses will use data to identify certain geographic areas or zones that have a strong demand for their products or services.

He said: "It actually makes sense to cut down the costs by presenting a product through a physical store rather than shipping from the warehouse."

foodpanda competitor Deliveroo, which opened its first central kitchen last year, has taken a similar approach.

While currently not available to the public for dine-in, the kitchen - Deliveroo Editions - gathers chefs from six different restaurants at a 2,110 sq ft kitchen space in Katong to prepare delivery orders.

A Deliveroo spokesman said: "As an online business, we have a lot of data on consumer habits, ordering trends and performance of specific food offerings."

"We also share this data with our partners which helps them make smarter, data-driven decisions to increase efficiencies and profits. For example, one of our F&B (food and beverage) partners, New Ubin Seafood, saw a 600 per cent jump in delivery sales after beginning operations from the Deliveroo Editions site in Katong."

Outside of the F&B industry, companies such as budget accommodation platform RedDoorz highlights the shift towards brick and mortar.

Earlier this month, the online platform launched its first fully-leased and fully-operated property in Singapore, a 65-room hotel in East Coast Road.

Amit Saberwal, founder and chief executive of startup RedDoorz, said that going into property management allows them to improve the experience for customers to stay, increase brand recognition, and complement the online business.

He said: "Going forward it is going to be a combination of the two models. The asset-light technology heavy model gives us an ability to scale quickly, while this kind of model can allow us to put the flagship property to support the brand."

Furniture retailer HipVan is another online business that has opened its first permanent 11,000 sq ft flagship store at The Cathay in Dhoby Ghaut last year.

Luxury e-commerce retailer Reebonz garnered eyeballs when it opened an eight-storey, 200,000 sq ft facility in Tampines last year as well, stocking and displaying a wide range of new and pre-owned luxury products.

Amitava Chattopadhyay, Insead professor of marketing, said: "Brick and mortar creates a social environment where people enjoy the shopping experience. That experience is not found online - it is in the real world."

SMU's Prof Lim said: "A big reason is to create more brand awareness, so that when people pass by the shops at the malls, they know about this online brand or retailer."

More brick and mortar outlets are in the pipeline.

foodpanda told BT that they are looking to open another two outlets in Singapore by the end of the year.

An earlier BT article also reported that RedDoorz plans to open 100 such hotel properties across the South-east Asia region this year.

Esther Ho, deputy director at Nanyang Polytechnic's School of Business Management, believes that brick and mortar is here to stay, along with online stores.

But she said that the physical stores of the future will not be just a showroom where consumers make purchases. "People will be excited to come to the store, where they enjoy the process of knowing about the product, interacting with the staff or technology present."

Concurrently, she added that online experiences will be more authentic - through technology such as virtual reality - allowing online experiences to be more in line with the physical stores.

"The exchange between online and offline will actually become more seamless, and as long as companies offer this seamless flow to consumers, they are likely to succeed."