GrabFood launches its first cloud kitchen in Singapore

Singapore

GRABFOOD is ramping up its cloud kitchens venture with plans to add more properties to its existing slate of more than 50 such kitchens in Singapore, Indonesia, Thailand, Vietnam and the Philippines.

This year, the food delivery service is also targeting to roll out a "unified" app for merchants with value-added services such as convenient access to loans and supplies procurement.

On Wednesday, GrabFood launched its first cloud kitchen in Singapore. Called a "GrabKitchen", the facility in Lam Soon Industrial Building along Hillview Avenue spans over 6,000 sq ft and houses 10 merchants, including Thai Dynasty and bubble-tea maker PlayMade. It also has a dine-in area to accommodate a small lunch crowd.

Cloud kitchens are centralised facilities where food and beverage players can rent cooking space, thus enabling them to serve a new location without setting up a restaurant.

Grab, which has rolled out most of its cloud kitchens in Indonesia, located its first Singapore cloud kitchen in Hillview because Bukit Batok is under-served, said Dilip Roussenaly, the head of GrabFood Singapore. There are currently only two GrabFood merchants in Bukit Batok for every 1,000 residents - far below the 3.7 national average, he noted.

Lim Kell Jay, regional head of GrabFood, said: "A lot of our (overseas) kitchens have outperformed what we expected from a demand perspective. Therefore it validates our strategy... We will continue to grow the number (of cloud kitchens) as long as it benefits our merchants."

He and Mr Roussenaly declined to disclose the cost of operating GrabKitchens, the rent Grab charges its tenants, the financial performance of Grab's existing cloud kitchens and the number of new cloud kitchens it plans to open this year.

Grab's entry into the cloud kitchen business in Singapore pits it against Foodpanda and deliveroo, which have their own cloud kitchens here.

Another player in this space is Smart City Kitchens (SCK), an independent cloud kitchen operator linked to former Uber chief executive Travis Kalanick.

Last July, SCK filed a competition complaint against GrabFood and deliveroo, alleging that these two platforms shut out SCK tenants. Asked for an update, Mr Roussenaly said Grab has started working with some of SCK's tenants and that it is "contributing" to the ongoing investigation by the Competition and Consumer Commission of Singapore.

On the "unified app" GrabFood is developing for merchants, Mr Lim said it will integrate relevant financial and advertising services from Grab's other verticals. For instance, GrabFood merchants will be able to apply for working capital loans from Grab Financial Group through the app.

GrabFood is also testing a procurement platform through which merchants can source for ingredients and kitchen supplies cheaply and have them delivered to their stores. It already offers this service in Indonesia.

"For us, this year is really going to be the year of merchants. We believe that when we put the merchants at the centre of what we do and we enable them to grow with us, we provide them the tools for them to maximise their returns," Mr Lim said.

The app will be rolled out in phases this year, across select markets. A Grab spokesman declined to comment whether GrabFood's plans could benefit from Grab's ongoing bid for a digital banking licence with Singtel.