Many local restaurants in Thailand have adjusted their menus for online orders, sought customers via social media and looking to local delivery apps during the ongoing Covid-19 crisis
Beset by high commission fees imposed by foreign food delivery apps, many local restaurants dealing with the pandemic in Thailand have adjusted their menus for online orders, sought customers via social media and looking to local delivery apps.
A local web-based platform that signs up restaurants and provides delivery service, developed by new startup ShaRe, has recently emerged to address these pain points as it charges no commission fees during the pandemic.
We are a new food aggregator startup, found at www.shareapp.co, that is an alternative for local restaurants and users, said Sanicha Laowiwatwong, managing director of pizza restaurant Basilico Pizzeria, one of the platform’s founders. We struggle with high commission fees collected by existing online food delivery apps that charge 30% per order while food profit margin is around 20%.
She said many food merchants she talked to said they can accept a commission fee of only 15%.
Unlike other food delivery giants, ShaRe gives the exact time for order and delivery.
For lunch, the order must be made before 9am and delivery carried out from noon to 1pm. For dinner, the order must come in before 3pm and food will be sent between 6pm and 7pm.
Users have to pay for meals and delivery fees directly to food merchants. To join the platform, restaurants must have their own driver partners.
In the platform, restaurant locations are divided into zones from A to Q. This makes it easier to manage and helps reduce delivery fees, Laowiwatwong said.
A delivery fee of 30 baht (RM4) is levied for an order within the same zone, around three kilometres in radius.
She said no commission fee is collected during the Covid-19 period, to assist restaurant partners in this difficult time. A mobile app is planned to be launched within the next 2-3 months.
The platform aims to tap merchants that sell via social media, such as Instagram and Facebook, and bring them into the community. More than 80 restaurants are active on the platform as of mid-April.
Laowiwatwong said her pizza restaurant has counted on several food delivery apps for service.
For Line Man, two programmes are offered to food merchants who can build their own virtual restaurants via the Wongnai app, its partner.
For the first, no commission fee, also called gross profit (GP), will be collected from restaurants. Line Man earns partly from delivery fees and advertising fees if merchants want to be promoted.
For another option, merchants can join a 10-baht delivery fee scheme, which could drive traffic to their restaurants, but they have to pay a GP fee of 20-30%.
A GP fee of 30-35% is collected by Foodpanda and 30% by GrabFood, Laowiwatwong said.
Some players offer free or low-cost delivery services through subsidy but gain high commission fees from food merchants, she said.
It’s hard for food merchants to add the commission fee to their food prices, she said, as this would affect buyer decision, while customers today compare prices with other restaurants or even prices between online orders and eat-in menus in the same restaurant.
During the crisis, Laowiwatwong said her restaurant has to adjust menus for delivery, such as a meal box priced 59 baht (RM8) as well as other lunch set menus.
She said online orders accounted for 30% of her restaurant’s revenue before the pandemic, and they cannot match earnings from sit-in services for which customers spend an average of 850 baht (RM114) per person.
Another food merchant in Bangkok’s Lat Phrao area, who asked not to be named, said different food app players come up with different policies for business.
For Grab, merchants are allowed to make their food prices sold online different from eat-in, while Foodpanda mandates that merchants set online and offline food prices the same, which could benefit customers but jeopardise merchants.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.