AirAsia not just delivering food here, but wants to deliver fresh food as well

BURSA-LISTED carrier AirAsia Group on Tuesday launched its food delivery service in Singapore, but it is already planning to edge into the fresh food delivery market soon.

The company crossed over to food delivery services in Singapore on Tuesday, dangling the carrots of charging merchants a lower commission at 15 per cent - compared to market rates of 25 per cent to 30 per cent - as well as 5 per cent lower in delivery fees for customers here.

But it won't be using a flat-fee structure as it earlier had announced, as AirAsia claimed that merchants are more familiar with the commission system. They will, however, get to enjoy flat fees for a start before migrating to commission.

Tony Fernandes, CEO of the airline group, told the media on Zoom video-conferencing that AirAsia will leverage its low-cost experience in running the budget airline to keep the cost of food delivery service here low.

The service, he said, will not have maps to indicate the position of the rider during delivery as one of the ways to save on costs.

"We're not here to take away anyone's business, or rice bowl, just like I said when we started AirAsia. We're here to build a new market to create more competition," Mr Fernandes commented.

So far, AirAsia has about 80 merchants in the pipeline waiting to go live, and another 300 in the process of getting on board, said Lim Ben-Jie, head of e-commerce for airasia super app.

The latest service is available on airasia food platform as well as through AirAsia's Asean super app, which Mr Fernandes let slip would have a turnover of US$250 million this year.

The company won't be only delivering ready-to-eat food here, but intends to get a slice of the fresh food delivery pie as well, which Mr Lim said could be launched in two to three months' time.