GrabFood bent on serving hawkers despite major barriers

Singapore

HAVING hawkers on a delivery platform might not appear to make economic sense, but GrabFood Singapore is determined not to leave the segment out. It plans to help hawkers digitalise their operations and to make sure users still have access to a "great variety of affordable food options" online.

The Covid-19 partial lockdown in Singapore has drawn attention to the unique challenge of serving hawkers, who have a revered place in the local food scene.

Hawker food is cheap, which means the dollar commission taken by delivery players is low, yet cuts deeply into the already thin margins for small business owners. The latter was what prompted ground-up initiatives that bypass third-party platforms.

It paints a lose-lose situation for hawkers and unprofitable delivery platforms. Dilip Roussenaly, the head of GrabFood Singapore, acknowledged that the hawker segment is challenging to serve - the average basket value for orders from hawkers is smaller compared to that of other food and beverage players.

Regardless, he believes technology will lower the barriers to serving this segment, though he was vague about how exactly it would do so.

One thing that the company is aiming to improve is demand density, so that more grouped orders can be fulfilled by delivery riders. This allows for more efficient use of the rider fleet, which is a significant cost factor in GrabFood's operations.

Last August, GrabFood launched a programme that let users order hawker food from stalls outside the typical delivery radius. This was possible because food prepared at the stalls were first consolidated at five hubs around Singapore, before being delivered.

The programme was discontinued as Grab needed to find a more scalable way to get more hawkers on board, The Business Times understands. Hawkers in the programme - there were about 70 stalls that participated as of end-August last year - were given the option of listing as a vendor on the main platform.

As GrabFood woos the hawker segment, it will have to contend with niche players in the market.

Hawker delivery service WhyQ charges a delivery fee of S$1.50 per meal, with the option to pre-order.

Newcomer HawkerFoodDelivery delivers about 1,600 meals every weekend to 120 condominiums, with more to be included. The website currently offers delivery from 12 hawker centres, comprising up to 300 stalls, and does not yet charge a merchant commission.

READ MORE: Is GrabFood Singapore chasing a pipe dream?